Finboot EIS

Co-investment alongside $53 billion turnover SABIC, one of the world’s largest petrochemicals manufacturers, in a fast-growing supply-chain-management SaaS platform

Global supply chains have seen unprecedented disruption over the last few years. Events such as the Covid-19 pandemic and the Russia/Ukraine conflict have resulted in clogged ports and empty shelves, exposing the complexity and vulnerability of global supply chains. 

Meanwhile, a plethora of regulations – such as the European Digital Product Passport, Fuel Quality Directive, Renewable Energy Directive, Net Zero Industry Act and the Inflation Reduction Act – require companies to prove that all aspects of their supply chain, from sourcing raw materials to delivering finished products or services to customers, meet increasingly stringent legal, environmental and ethical standards. 

Global supply chain visibility and traceability are key – both to de-risk costly upheavals and comply with legislation.

However, until recently there has been no trusted process or platform to help do this across multiple countries and jurisdictions.

Launched in 2018, Finboot Limited (‘Finboot’ or ‘the Company’) was set up to provide global enterprises – particularly those in capital-intensive, difficult-to-decarbonise industries such as Oil & Gas, Chemicals and Steel – with digital traceability and authentication solutions, powered by blockchain.

Finboot’s SaaS platform, MARCO, connects multiple ledgers simultaneously. It brings transparency, traceability and synchronised planning – this can significantly cut time and costs, and also means all transactions are verifiable and produce a digital audit trail.

MARCO can be easily implemented, thus accelerating ‘time to value’ for customers. For example, the Spanish multinational energy company Repsol reported a 4x return on investment (ROI) in the first year of using MARCO and has since invested in Finboot.

Finboot has annual recurring revenues (ARR) of approximately £599k, generated by its global enterprise customers this year. This is forecast to grow to £1.7 million ARR in the 12 months from completion of the round, a significant proportion underpinned by existing contracts and customers – not guaranteed. 

The Company has been backed by high-profile investors, including €75 billion turnover Spanish multinational energy and petrochemical company Repsol – also a customer – and Supply Chain Ventures, a US-based VC focusing on supply chain investments.

Now, to keep pace with demand and service the growing number of contracts, the Company has launched a £3 million funding round, led by a second strategic investor, Saudi Arabia’s Basic Industries Corporation (SABIC). SABIC is one of the world’s largest petrochemicals manufacturers. It is already a customer, having tested and implemented the MARCO platform for more than a year, and showed its commitment by publicly referring to Finboot in its company annual report.

SABIC undertook a comprehensive review of the market, including Finboot’s competitors. SABIC considered Finboot had a superior offering and the findings of its extensive technical and commercial due diligence supported this. SABIC’s £1.5 million investment is now ready to go ahead. 

For a limited period only, Wealth Club has an exclusive allocation for the remaining £1.5 million, to invest alongside SABIC under EIS. Applications will be accepted strictly on a first-come, first-served basis. Predicated on successfully raising funds, the Company is forecasting £33 million ARR and £7.8 million EBITDA by FY27, by expanding with existing customers and partners and winning new ones.

Based on its forecasts, the Company targets mid-case returns of 12x (73% IRR) in FY27, after performance fees but before EIS relief – high risk and not guaranteed. 

The deal at a glance

Highlights

• Regulation driving demand
  
• Global enterprise customers in a growing and resilient market 
• Confirmed multi-year contracts with SABIC (2025) and Repsol (2026)
• Core digital solution integrated with customers' legacy and emerging systems
• Strategic trade investors with significant growth potential 
• Capital efficient and scalable SaaS model
• Extensive commercial and technical due diligence successfully completed 
• High-quality management, board and advisors with global experience across target sectors 
• £1.7 million ARR expected in 12 months from completion of the round, forecast to grow to £33 million ARR by FY27 – not guaranteed
• Forecast profitability from Q4 2025 – not guaranteed
• Minimum investment £19,950 (26,250 shares at £0.76 per share)
  
• Mid-case target returns of 12x pre-tax relief after 4-5 years – not guaranteed
• Private single company offer with no diversification – high risk

The market opportunity

Supply chains are an essential part of a company’s operations and have a huge impact on business continuity and profitability – but can be difficult to manage. They frequently cross borders; and as degrees of separation from suppliers increase, so do the risks. Meanwhile, consumers continue to demand short delivery times, adding pressure.

A plethora of regulations reflect the growing emphasis on environmental and climate concerns in global policymaking. Companies must meet ever higher standards and prove compliance: this includes all the different kinds of carbon emissions a company creates in its own operations as well as its wider ‘value chain’, including its suppliers and customers. 

New technologies may be required to address these challenges. It is anticipated many companies will turn to blockchain technology, which can replace current fragmented systems with a single interoperable solution. 

This could potentially significantly reduce the risk of unethical sourcing, shipping delays, inadequate storage or ineffective distribution of goods. It could also furnish companies with irrefutable proof they are meeting supply chain standards which they can share with customers to protect their brand, with regulators to stay compliant, and with investors to attract more capital. 

A recent Citi article predicted that, out of all the emerging technologies, blockchain has the highest market growth potential.

Finboot typically targets companies (or those part of a larger group) with at least $500 million sales in Oil & Gas, Chemicals and Steel. The company estimates there are over 250 companies of this size in the Oil & Gas sector and over 140 companies in Chemicals. 

The wider global supply chain management market was estimated to be $25 billion in 2022 and to reach c.$72 billion by 2032, a projected CAGR of 10.9% during the forecast period. When looking at the broader enterprise opportunity, Citibank estimates the total addressable blockchain market to be £121 billion (March 2023).

Currently, Finboot’s main competitors include Blockapps (US), SettleMint (Belgium) and Circulor (UK). The Company considers its competitive advantage to be its “low cost, low hassle” adoption for customers. Most competitors have raised significantly more capital than Finboot, but appear to be not much more commercialised. Refer to the IM for more information on market and competitors.

The business

Multi-award winning technology company Finboot was founded in December 2016 to simplify blockchain for business, primarily focused on helping global organisations with end-to-end traceability of the supply chain. 

The founding team took a few years to develop MARCO before launching the first application, Track and Trace. Further applications are being developed and the Company’s objective over the next 3-5 years is to become the leading vendor for digital traceability solutions across all its target markets.

Finboot’s existing customers include Repsol, SABIC, listed German specialty chemicals company Evonik, and Spanish multinational oil and gas company Cepsa.

Finboot has a comprehensive policy to protect and register all its IP assets. The technology behind MARCO is protected by Trade Secret and Copyrights. Additionally, Finboot holds several product-related trademarks.

The Company is headquartered in Cardiff, with an office and wholly-owned subsidiary in Barcelona. There are currently 23 employees. 

Awards

2020 – Finalist, Energy Awards 

2021 – Highly commended, FinTech Wales; awarded Blockchain Innovation of the Year, National Technology Awards 

2022 – Finalist, Best Blockchain Application Award, Wales Technology Awards 

2023 – Shortlisted for seven awards to date:

• The Supply Chain Innovation Award – Technology at the Supply Chain Excellence Awards; 
• Shortlisted by PWC for the Smart Solution Award at the Supply Chain Awards 
• UK Tech Award: best use of tech in the digital economy award
• Economic Innovator of the Year Awards 2023
• The Bold Awards: boldest-blockchain and non-fungible tokens
• The EUTech SDG Awards
• The Humber Awards

Finboot by numbers 

• Implemented MARCO technology in over 25 enterprise customers with 5+ global companies 
• Backed by two global, strategic trade investors and 2 US and UK funds 
• Serves 80% blockchain implementations by the Top 100 public companies using blockchain
• 4x ARR growth since 2020 
• £1.7 million ARR forecast next year – not guaranteed
• Raised £4.3 million to date (equity) plus approx. £150k in grants
• Average signed contract length: 12 months and rolling
• Average onboarding time: 3 months

The product 

MARCO is a low-code platform designed to integrate with an enterprise’s existing technology systems. To help accelerate the adoption of blockchain technology, it is designed to enable any developer with basic programming skills to take full advantage of blockchain – with no detailed understanding of the underlying technology required. 

Its first application, Track and Trace, has become a core digital solution (built by Finboot). Its functions include Digital Product Passports, ESG reporting, Automated Mass Balance bookkeeping, Automated Carbon Emission Tracking and Supply Chain Data Sharing.

Example use case: MARCO was selected by SABIC after conducting a comprehensive search of the market reviewing competing technologies and Finboot’s direct competitors. In the pilot project, MARCO was applied to the production of some of SABIC's plastic products. Using MARCO, SABIC now has the data to show what impact making each plastic pot had on the environment and proof of how many recycled materials had been used in the process.

Finboot has a global and multilingual implementation and support team capable of servicing clients in English, Spanish, and Portuguese. Applications are available in seven languages (English, Spanish, German, French, Portuguese, Turkish and Welsh).

The MARCO platform offers customers the following key benefits:

• Configurability and flexibility through simple no-code apps – Enterprise customers require software solutions to adapt to their processes (not the other way around). Traditionally, this involves significant professional services fees in addition to software fees. With MARCO’s no-code approach, no additional third-party configuration costs are incurred. 
• Interoperability to legacy and emerging tech – MARCO was designed for full interoperability. Blockchain traceability ecosystems do not live in isolation. Vendors must have the capability to integrate and interoperate with legacy and emerging systems.
• Industry-specific know-how – Enterprise buyers require vendors to have a deep understanding of their industries and their processes. Finboot’s team complements the MARCO product offering with account management and implementation services. The team has industry experience specifically around the areas of supply chain and sustainability. 
• Combining and simplifying blockchain benefits – MARCO delivers transparency and traceability, smart contracts for automation, accurate auditing to reduce disputes and discrepancies, and cross-organisational real-time visibility. 

Refer to the IM for further information on product and technology roadmap.

Ioannis Vlachos and Arno Laeven (founder and former leader of Shell’s Blockchain Centre of Excellence) from Warren Brandeis, independent experts in decentralised technologies, carried out due diligence on Finboot. Their findings are summarised below.

Routes to market and revenue model

Finboot is a B2B SaaS business, selling directly to end-user enterprises and through partners. 

Direct customers

Revenue streams are comprised of configuration fees (at the start of the contract) and recurring monthly (tiered) subscription fees, subject to an annual review. Typically, in the first year of the contract, 70% of the fees are recurring. In most cases, thereafter 100% of the fees are recurring. The current average contract length varies from one to five years. Repsol, the longest-standing customer, is in year 5 with a renewal commitment to year 8.

Partners

MARCO’s Software Development Kits can be used by partners to build new applications or power existing systems. Since launching the partnership programme in 2022, Finboot has acquired three partners – Nitor Infotech, (an Ascendion Company, India), Quantion (Spain) and Amey (UK). 

Amey is a leading provider of full life-cycle engineering, operations and decarbonisation solutions for transport infrastructure and complex facilities in the UK. It has entered into a partnership with Finboot to develop a blockchain solution using MARCO, to reduce costs by improving operational efficiency and railway reliability.

Fees generated from partnerships are based on reseller agreements where partners obtain a discount on the standard monthly subscription fee. Partners then engage directly with enterprise customers for their services including building applications on the MARCO platform, implementations and ongoing support.

Growth strategy

The Company’s strategy to date has been to win flagship customers across capital- and carbon-intensive industries. Once a client has been onboarded, Finboot aims to grow the account over time aiming for its technology to become a crucial part of the organisation. Repsol is evidence of this, and SABIC and other existing customers are expected to follow suit – not guaranteed.

Management believes growth of the partnership model is also key to achieving its long-term forecasts, along with continued product development and enhancement of MARCO.

Refer to IM for further information on growth plans.

Current trading and financial forecasts

ARR is expected to grow to £1.7 million within the 12 months from completion of the round, some of which is underpinned by existing customers on multi-year renewals – forecast and not guaranteed. 

The Company aims to achieve monthly EBITDA profitability by the end of 2025. Many contracts are paid annually in advance, so the Company expects to be highly cash generative.

Management projects that the business will grow to 182 customers and 79 partners by FY27. This is forecast to generate £33.8 million ARR and £7.8 million EBITDA – not guaranteed. 

A future fundraising is anticipated to accelerate growth further, SABIC has expressed the intention to participate – not guaranteed.

For more financial information, forecasts and assumptions, please refer to the Financials, Capital Structure and Target Returns Overview.

Private offer

Finboot aims to raise up to £3 million in this round. Of this, £1.5 million has already been committed by SABIC, which has carried out its due diligence. 

Investors can subscribe for new EIS-qualifying ordinary shares – see the Financials, Capital Structure and Target Returns Overview for share price and valuation.

EIS certificates have previously been issued without delay, most recently in June 2023. For this round, the Company has engaged tax advisers Philip Hare Associates to provide opinion that the Company remains EIS-qualifying. 

Capital in this round is expected to be deployed to help the Company keep pace with demand, grow internationally and further develop the platform. 

Funding to date

As set out below, total investment to date (excluding current SABIC-led round) is £4.3 million, along with £150k non-dilutive grants.

• 2018 – £0.22 million led by Tom Singh, Founder of fashion retail chain New Look
• 2019 – £1 million led by Repsol Corporate Ventures
• 2021 – £2.58 million led by Development Bank of Wales (DBW) with Repsol Corporate Ventures and existing shareholders following on
• 2021 – £0.2 million invested through a SAFE (simple agreement for future equity) by US VC Supply Chain Ventures (SCV)
• 2023 – £0.32 million from existing shareholders
• Finboot was selected to the Entrepreneur Fund run by Fundación Repsol. Finboot was the first company to receive an investment from Repsol Energy Ventures following the Fundación grants. In addition, Finboot was awarded European H2020 SME Phase I grant. 
• Recently Finboot has been awarded a grant from Spain’s Ministry of Industry Trade and Tourism. This is a joint project led by Spanish state-owned shipbuilding company Navantia with the participation of Repsol focused on the development and traceability of Sustainable Fuels for maritime shipping. 

Finboot is currently applying for two supply chain innovation challenges with UK Research & Innovation. US-based SCV makes investments in young, revenue-generating companies that use technology to enhance global marketing and supply chain management. Besides capital, it aims to bring entrepreneurial, operating and investment experience.

SCV invested £0.2 million under a SAFE, the terms of which give it the right to convert their SAFE into equity. Unlike a convertible loan note, there are no interest or other costs incurred. The SAFE will convert in this funding round at the same valuation as SABIC and Wealth Club.

The current ownership is summarised as:

• DBW – 9.62%
• Repsol –  7.35%
• Tom Tar Singh – 4.86%
• Executive founders’ holding (3 founders) – 33.56%
• Employee holdings and options – 9.52%
• Others – 35.10%

Target returns and exit

If the Company successfully delivers its growth plan, it could become a highly attractive asset with several exit options. Given the current level of commercialisation, management aims to prepare the Company for an exit in three to five years – not guaranteed.

Predicated on achieving its forecasts, the Company believes it could attract an EBITDA multiple in the mid to high teens. Management is aiming for a valuation in the order of £100 million by FY27. Based on the Company’s forecasts, the mid-case target return in this round is 12x (73% IRR), before tax relief and after performance fees – high risk and not guaranteed.

For more details, please refer to the Financials, Capital Structure and Target Returns Overview.

Management, Board & Advisors

Finboot’s management team and Board have significant experience and many of them have worked together previously. 

Senior management team 

Executive Chairman and co-founder Nish Kotecha is a serial impact and technology entrepreneur, journalist and investment banking and Board professional.

He founded Geosansar, a fintech pioneer in India, to provide financial inclusion to the 600 million people who have no bank accounts. Combining technology and traditional opening models, Geosansar became the primary banking service provider for over 25 million customers. He was the founder of TIE UK and formerly a Global Trustee; Former Business Banking Resolution Service Co-Chair & SME Panel Member; Former Deputy Chair London of Chamber of Commerce, Chairman of the Investment Committee & Industry & Chairman of London Chamber of Arbitration and Mediation amongst others. He started his career as an Investment Banker at Lehman Brothers, JP Morgan and Barclays (BZW), and founded an advisory boutique, Sphere Partners. He is a graduate of the LSE.

CEO and co-founder Dr Juan Migel Perez Rosas is an engineer with a PhD in Photonics and a strong focus on design and development of technology-enabled products. He has extensive experience and a successful track record of applying digital technologies to a wide range of sectors, including Oil & Gas, Chemicals, Consumer Goods and Healthcare.

CTO and Co-founder Angel Paterio is a computer science engineer with experience in both startups and large corporations. He has 10 years’ experience in ICT and is a blockchain expert.

Head of Finance Charlotte Mancuso is a qualified accountant and has wide ranging experience, including in corporate finance, management accounting, financial reporting, and budgeting. In June 2019, she was awarded the most successful student sitting of the ICAEW/CISI Diploma in Corporate Finance. In 2016, she was the ACCA Cymru Wales prize-winner of the Sir Julian Hodge Foundation award.

Head of Product Alvaro Llobet is an expert in blockchain technology. He drives growth and innovation by developing product strategy and vision, based on market research and customer needs. He has extensive experience across the sectors Finboot targets and in both startups and large enterprises.

Board 

In addition to the Founders, the Board comprises:

Independent Non-executive Director Padman Ramankutty is a supply chain expert and serial entrepreneur. Prior to Finboot, he was a Managing Director at Accenture. 

Independent Non-executive Director Bettina Uhlich has 25 years’ experience as a senior business executive and was formerly CIO at Evonik.

Repsol / Net Zero Ventures, represented by Natalia Ruiz Saez (Non-executive Director) & Carlos Gonzalez Guil (Board Observer) 

Repsol S.A. is a Spanish multinational energy and petrochemical company based in Madrid. It is engaged in worldwide upstream and downstream activities. In the 2023 Forbes Global 2000, Repsol was ranked the 290th-largest public company in the world. 

Repsol's Corporate Venturing investment fund, Net Zero Ventures, aims to capture technological innovation that is already close to commercial deployment, and can be tested quickly to assess its potential. It focuses on the decarbonisation and circular economy, and specifically seeks to invest in companies that can help Repsol’s own R&D and growth strategy. 

Advisory Board

Avanish Sahai has 30 years’ experience in Silicon Valley developing and leading the platform strategy for Google Cloud, Salesforce, ServiceNow and HubSpot.

Geoffrey Cann is an oil and gas expert and provides digital awareness training for oil and gas organisations. Previously, he was Senior Consulting Partner at Deloitte for over 20 years. 

John Fletcher a climate management and ESG expert. He has more than 30 years’ experience in chemical and automotive industries, in leading sustainability and digital roles.

After the round SABIC will join the Board. 

SABIC

Ranked among the world’s largest petrochemicals manufacturers, c. US$ 50 billion market cap, SABIC is a public company based in Riyadh, Saudi Arabia. 70% of the company’s shares are owned by $2.1 trillion Saudi Aramco (the Saudi Arabian Oil Group), with the remaining 30% publicly traded on the Saudi stock exchange. The company has operations in around 50 countries, with a global workforce of over 31,000. 

Its parent Saudi Aramco is the second-largest company in the world by revenue and is headquartered in Dhahran. It reported a record $161 billion (£134bn) profit for 2022, the largest annual profit ever recorded by an oil and gas company. 

Wealth Club will have its usual information and EIS protections. Additionally, Wealth Club has the right to appoint an Independent Investment Director to the Board, subject to raising a minimum of £1.5 million.

Risks – important

This is a single company offer with no diversification. It involves investing in an early-stage pre-profit business, which is by nature high risk and prone to failure. There is a risk that the capital raised may not be sufficient to achieve the Company’s objectives. You could lose all the amount you invest.

Like all investments available through Wealth Club, it is only for experienced investors happy to make their own investment decisions without advice.

There is no ready market for unlisted EIS shares: they are illiquid and hard to sell and value. There will need to be an exit for you to receive a realised return on your investment.

Exits are likely to take considerably longer than the three-year minimum EIS holding period; equally, an exit within three years could impact tax relief. The value of tax benefits depends on circumstances and tax rules can change. 

Before you invest, please carefully read the Information Memorandum, which contains further details on the considerable risks – alongside the Wealth Club Risks and Commitments.

Fees and structure

Investors will pay no direct initial or ongoing charges to invest. Fundraising costs are being met by the Company. Wealth Club will be entitled to a performance fee on exit predicated on returns hurdle being met. 

Wealth Club investors will invest using a nominee structure. This service is provided by Wealth Club’s subsidiary companies Wealth Club Asset Management Limited (authorised and regulated by the FCA) and Wealth Club Nominees Limited. Wealth Club Nominees Ltd will be completing the share subscription documentation on investors’ behalf.

Please refer to the Schedule of Charges for more details on charges (may vary for different rounds and offers). 

All the services Wealth Club and, where applicable, its subsidiaries provide are governed by the Terms and Conditions of the Wealth Club Services.

Our view

Finboot has had extensive independent due diligence, far more than customary for companies of this size and stage, and the findings were overall highly positive. The Company’s strong product offering and compelling commercial approach is further evidenced by its ability to win and retain global customers. Collectively, its management, board and advisers have expertise and experience in scaling up businesses in the markets Finboot targets. 

Finboot appears to have a promising future and could take a leading position in its chosen markets, if it can continue growing over the next couple of years – not guaranteed, you should form your own view. Demand for MARCO is expected to be driven further by increasing regulation. 

The investment and ongoing commitment from both SABIC and Repsol could potentially be highly valuable and create many more strategic opportunities. The valuation at under 10x current year revenues and 4x next year’s revenues, some of which is already contracted without the additional upside, could be appealing in our view.

We consider this to be a high-quality and potentially compelling, albeit high-risk, EIS investment opportunity and as usual you should form your own view.

Wealth Club aims to make it easier for experienced investors to find information on – and apply for – investments. You should base your investment decision on the offer documents and ensure you have read and fully understand them before investing. The information on this webpage is a marketing communication. It is not advice or a personal or research recommendation to buy any of the investments mentioned, nor does it include any opinion as to the present or future value or price of these investments. It does not satisfy legal requirements promoting investment research independence and is thus not subject to prohibitions on dealing ahead of its dissemination.