Rate the deal – which of these businesses deserves five stars?

Archived article

Archived article: please remember tax and investment rules and circumstances can change over time. This article reflects our views at the time of publication.

Three very different established firms are raising funds under the EIS to help them through the next stage of growth. Using EIS, investors could benefit from 30% income tax relief, capital gains deferral and IHT relief. 

As an experienced investor, what’s your gut feeling? Do you think any of them have what it takes to succeed?

Please rate each deal below – we’ll email you the results on Monday 21 November.

Push Doctor single company EIS1. Push Doctor (“PD”) 

The business

It takes an average of 13 days to get a routine GP appointment. But what if you need to speak to a doctor at 9 on Saturday evening – and don’t want to wait a fortnight? Push Doctor aims to provide a solution. You can get a video appointment with an NHS registered doctor ‘on demand’ on a computer or mobile phone, usually within 6 minutes. 

There are 7,000 NHS GPs registered with the service. Patients can pay per appointment – from £20 per 10-minute appointment – or pay a monthly subscription of £20. At the end of the consultation, the GP can provide a prescription, a sick note or a GP referral – charged extra for pay-per-appointment patients. 

The fees are split between the GPs and PD. 

The growth opportunity 

Currently PD has over 1,000 appointments per week, growing at a rate of 12% week on week, with a 17% rate of repeat appointments. The estimated annual turnover for 2016 is £800,000. The management believes this proves PD is growing faster than any UK competitor. The forecast for 2017 is a turnover of £5.6 million.

PD also offers services to businesses, providing consultations as part of employee/customer benefit packages. Current clients include Uber, STA travel and Danone. In addition, PD is an NHS commissioned technology provider, helping the NHS deliver better digital healthcare affordably, safely and sustainably.

The financials

This is an opportunity to co-invest in PD alongside well known financial institutions. A total fund raise of £3.4 million is being targeted to support PD in becoming the UK’s leader in the digital primary healthcare market.

Oxford Capital, Draper Esprit and Partech invested £3.9 million in December 2015. Full due diligence was undertaken at the time. These institutions, led by Oxford Capital, continue to be impressed with the management team and will commit further funding in this round.
The pre-funding valuation is £11 million, which calculates at £415.83 per share. The investment is EIS qualifying, and advance assurance has been received. 

How would you rate Push Doctor?

Please give your rating, by clicking on the stars below.

BorrowMyDoggy single company EIS2. BorrowMyDoggy ("BMD")

The business

Most dog owners cannot be with their dogs 24/7. There are also many dog lovers who would like to own a dog, but can’t. BorrowMyDoggy matches the two, solving both problems. Dog lovers volunteer their time to take local dogs for one-on-one dog sitting. Owners get peace of mind knowing their dog is being taken care of by a verified, insured dog lover.

The growth opportunity

BMD is a subscription business. Dog owners pay £44.99 per year and borrowers pay £9.99. Subscriptions are paid in advance, creating a recurring revenue stream.

There are 9 million dogs in the UK and Ireland and BMD estimates around 70% of dog owners use services such as dog sitters, dog walkers and kennels, spending an average of £242 a year, more than five times BMD’s annual subscription. There is a significant opportunity for international expansion in USA and Europe, where there are more than 100 million dogs.

The financials

BMD was founded in 2012 and has received £2.1 million in subscriptions since. It was shortlisted in the prestigious Europas Awards for Best Sharing Economy Start-up.  Founder and CEO, Rikke Rosenlund, was shortlisted for Best CEO.  As of today, BMD has 523,000 members and 58,500 subscribers.  

It has so far received investment of £1 million and is looking to raise a further £650,000. It forecasts to generate EBIT of £4.4 million on revenue of £10.1 million in 2020. It ambitiously aims to deliver investor IRR of 73% and a cash multiple of 9.5x net cost of investment. The investment is EIS qualifying with advance assurance received.

How would you rate BorrowMyDoggy?

Please give your rating, by clicking on the stars below.

OfficeServe single company EIS3. OfficeServe ("OS")

The business

Office Serve is an established business providing freshly made, high-quality food to offices nationwide.  OS currently has 3,000 active accounts including Grant Thornton, Whitbread Hotels, The Gordon Ramsay Group, British Airways, JD Wetherspoon, Gate Gourmet and Eurostar.  

OS acquired Fruitdrop and Chiltern Foods as part of its high growth strategy. The combined group has sales of £10 million and is currently breaking even.  

The growth opportunity

The office foodservice market is fragmented and OS wants to raise further funding to develop its national offering and take a market-leading position. Funds raised will be used to improve operations across the combined group, implement new branding and develop packaging and products. A highly experienced and proven Chairman, formerly the CEO of a FTSE100 food retailer, has just been appointed to help implement the growth strategy. 

The financials 

Management forecasts sales to hit £55 million delivering £3.9 million EBITDA by 2020, with the opportunity to exceed that due to the scalable nature of the opportunity.  The forecasts are based on assumptions on winning new corporate customers, growth in average spend per corporate and scaling up existing national customers.

The target raise is £3 million of which £2.5m has already been secured. The investment is EIS qualifying and received advance assurance in 2015. Management believes nothing within the business has changed which could impact its EIS status.

How would you rate OfficeServe?

Please give your rating, by clicking on the stars below.

Please note: these are high-risk/high-potential return opportunities. Tax benefits depend on circumstances and tax rules can change. All the figures quoted, unless otherwise specified, are projections. Actual returns may be different.  

Wealth Club aims to make it easier for experienced investors to find information on – and apply for – tax-efficient investments. You should base your investment decision on the provider's documents and ensure you have read and fully understand them before investing. This review is a marketing communication. It is not advice or a personal or research recommendation to buy the investment mentioned. It does not satisfy legal requirements promoting investment research independence and is thus not subject to prohibitions on dealing ahead of its dissemination.