This overview is provided to make it easier for you to form your own view about the opportunity.
What Wealth Club has done: we have verified the Company details, gathered information about the management team, reviewed the information provided by the Company and done our own research. Note: this doesn’t constitute an audit.
What to expect post-investment: the Company should provide bi-annual updates for Wealth Club to distribute to shareholders. The Company may also communicate with shareholders directly, however Wealth Club Nominees, which holds the shares, will be responsible for all corporate resolutions and communications relating to voting and pre-emption matters.
40+ clients, including U.S. Air Force, U.S. Department of Defense, Verizon and L'Oréal: cloud optimisation platform that can save clients 30% in costs
Cloud computing has witnessed exponential growth over the past decade, helping organisations move faster, be more agile, and innovate their businesses. 78% of executives say they have adopted it in most or all parts of their businesses, according to a recent survey by PwC.
This year, an estimated $590 billion will be spent globally on public cloud services – 20% more than the year before.
However, with organisations increasingly spreading their workloads and applications across public and private clouds, as well as using multiple service providers, managing the cloud has become more complex and expensive.
It is estimated only three in 10 organisations fully understand their cloud costs and a third of cloud computing spend goes to waste.
To address this, Hyperglance Limited (“Hyperglance” or the “Company”) has developed a cloud management platform which is used by government agencies as well as large enterprise customers, to gain a 360-degree view of their cloud estate, optimise decision making, improve security and cut costs by around 30%.
Customers include U.S. Airforce, U.S. Department of Defense, FBI, Verizon, L'Oréal and cloud security company Gigamon to name a few.
The Hyperglance platform is specifically designed for large, complex organisations and – unlike its competitors’ – can be deployed within a client’s cloud environment (i.e. inside their firewall). This means data never leaves the customer’s systems – a crucial requirement for government agencies and corporates prioritising data security.
The Company currently has approximately £1 million annual recurring revenue (ARR), including imminent contract wins, and forecasts this to grow to £1.7 million this financial year ending March 2024, growing to £8.9 million the year after – not guaranteed.
Now, to capitalise on growing sales momentum Hyperglance is looking to raise £3 million – £1.5 million of which by Q1 2024 – under EIS to expand its sales and support teams and continue to invest in the platform.
£0.3 million has already been invested by an ultra high net worth member of Wealth Club and the offer is now being made available to all Wealth Club members. In addition, existing shareholders are expected to support the round with up to £500k.
Predicated on successfully filling this round, the Company is forecasting sales of £41 million and EBITDA of £13 million with ARR of £49 million five years after investment, potentially valuing the business between £150 million over £200 million – not guaranteed.
Based on the Company’s forecasts, the target return in FY28 is 9x (IRR 60%) after performance fees, but before EIS tax relief. Investing at this early stage means rewards could be significant, but so are the risks.
The deal at a glance
|Single company EIS private offer
|Date launched cloud B2B offering
|Funding to date
|Enterprise software - cloud management technology
|Fully diluted pre-money valuation
|£16 million (including 20% performance related options)
|$250 billion (qualified addressable market)
|Business / revenue model
|Revenue last 12 months
|EBITDA positive from*
|FY26, cash generative FY25
|Forecast revenue in FY28*
|£41 million (£49 million ARR)
|Forecast EBITDA in FY28*
|Target return in FY28*
*Forecast, high risk and not guaranteed.
The market opportunity
The cloud computing market has grown substantially in the last decade, reaching $490 billion in 2022. Market research firm, Gartner, projects it to grow 20% to $590 billion by the end of 2023.
According to data from Google Cloud, more than 40% of business executives and IT leaders plan to increase their investment in the cloud in the near future and this has led to longer-term projections of market growth at c.14% p.a. through to 2028.
The more global cloud spend grows, the more scrutiny over cost increases. Organisations are increasingly looking to cloud service providers or other technologies to help them rationalise and reduce their cloud costs – from identifying duplicate spend to reducing usage after hours.
The Cloud Management and Security Services sub-sector is estimated to grow to $42 billion in 2023 – an increase of 30% over 2022 and one of the fastest growing areas of the market.
This has attracted well-funded competition, including Israeli and US unicorns Wiz and Drata on the security and compliance side and Cloudability on the cost optimisation side.
There appears to be no competitors focusing on both: security and compliance as well as cost management, leaving customers with a fragmented cloud management solution.
Hyperglance’s all-in-one platform provides both security and compliance coverage as well as cost optimisation insights. Management believes it is one of only three comparable solutions, which could explain Hyperglance’s success against its competitors in competitive tenders in recent months. The Hyperglance solution ensures that all data stays within the company’s network perimeter, ensuring data security and compliance, which is resulting in significant interest from government agencies.
Watch our interview with the CEO: Steve Robinson (recorded 16 January 2024)
Hyperglance was founded in 2007 by tech entrepreneur Stace Hipperson as part of leading managed IT services provider Intergence Systems (his employer at the time). The Company was later spun out in 2011 before pivoting to its current cloud-management offering in 2019.
Originally, Hyperglance was sold primarily through marketplace partners to customers on rolling monthly contracts. In 2022, the Company brought in Steve Robinson as CEO to lead this scale-up phase.
Since coming on board, Steve has driven expansion into government and defence markets where Hyperglance has a distinct advantage over competition and successfully negotiated significant contract expansions.
Stace Hipperson continues to provide strategic guidance as a director and shareholder. The company is based in London and has a small sales & marketing team in the US. Hyperglance has 15 staff.
Company by numbers
- 40+ customers including government agencies and global enterprises
- Direct customers include the FBI, U.S. Air Force while marketplace customers includes U.S. Cyber Command and General Dynamics
- ARR: £1 million (taking account of imminent contract wins), expected to reach £1.7 million by March 2024 – not guaranteed
- Average annual contract value: $54k
- Average sales cycle 4.9 months
- Average signed contract length: 12 months
- Average onboarding time: 30 minutes
- Net Revenue Retention: 116% (direct customers three-month rolling average)
- Gross Revenue Retention: 89% (direct customers three-month rolling average)
- Projected EBITDA margins at maturity: over 30% in FY28
- Return on Investment for Customers: 3 to 5 months
Many of the above metrics are in the top quartile of SAAS companies based on independent benchmarking by Benchmarkit.
- 2023 - Cybertech100 award recogising world’s most innovative CyberTech companies
- 2023 – Top 3 finalist for the Infoworld Technology of the Year Awards (Cloud Cost Management)
Hyperglance provides large organisations with clarity over complex, multi-cloud environments. It uses AI-enabled visualisation software to map relationships between resources, risks, costs and configurations across AWS, Azure, Kubernetes (K8) and other cloud systems.
Hyperglance combines four key areas of cloud management functionality:
- Cost management – provides teams with visibility across all cloud infrastructure to identify duplicate costs and wasted spend
- Security management – monitors and automates Cloud Security Posture Management to identify security gaps and uses AI to proactively provide solutions to these issues
- Compliance – to ensure cloud networks comply with data management and infrastructure regulation
- Search and document – maintains live cloud infrastructure documentation to allow easy search and tracking of all cloud resources
All of these areas are enhanced by an advanced automation capability which enables automatic response and timely rectification of any identified issues or sub-optimal conditions.
The platform helps users around the business work more efficiently with existing cloud infrastructure. For example, cloud architects can better visualise the system to reduce complexity, tech teams can better understand usage and reduce costs and security analysts can identify and respond to security threats more easily.
Benefits for customers
The Hyperglance platform offers customers the following key benefits:
- Up to 30% cost reduction by eliminating waste
- Return on investment for customers in 3-5 months
- Continuous threat monitoring to accelerate security responses
- Real-time cloud framework documentation helps maintain compliance and governance across cloud infrastructure
- Provide full stack clarity to streamline cloud management activities
As an organization with strict compliance requirements, quickly identifying security gaps is a top priority. Hyperglance enabled us to easily characterize an ever-changing architecture and clearly communicate its security posture to leadership and third party assessors. Furthermore, the cost data and filtering features directly enabled a 4 member team to reduce our organization's cloud spend by 30%Captain, United States Air Force
Hyperglance’s key IP is in its underlying coding. This is difficult to patent. However, it is also difficult and expensive to recreate.
The Company has trademarked its brand and logo and uses a trademark watching service to monitor for infringements.
Revenue model and route to market
Hyperglance has two separate routes to market:
Direct Sales & Partnerships
The Company has its own sales team and originates its own contracts. These are typically won by offering a 14-day trial to sales-qualified leads, after which management reports a 90% conversion rate from demo to trial, with 1 in 4 trials subsequently converting into a paying customer. Over the past year Steve has rapidly expanded the focus on direct sales and alliance partnerships to accelerate revenue now accounting for c.70% of current sales mix
Contracts are annual, with average contract values around $54k. Typically contracts are paid in advance; a significant cashflow advantage.
Over the last 12 months, the Company has secured a number of partnership agreements with key players in government and defence, which is key to accessing these channels and has already delivered a number of strategic clients such as the U.S. Air Force.
Historically, the business sold primarily through marketplaces like the AWS and Azure stores on a rolling monthly basis with an average contract value of $11k. In FY21, this revenue stream represented 81% of sales. Given both the cashflow advantage and significantly higher contract value of direct customers, the Company has been reducing its focus on marketplace customers. Consequently, this revenue stream is expected to make up c.33% of revenues in FY24 and fall to 25% thereon.
Management intends to grow through focusing on direct sales and implementing both a land & expand strategy and investing in customer retention.
Direct sales contracts represent the higher contract values and most predictable source of revenue for Hyperglance.
Management has recently achieved c.2x growth in the two largest accounts over the last 12 months and believes this success can be replicated with other blue-chip and government clients.
Refer to IM for further information on growth plans.
Developments since last funding round
Hyperglance last raised £1.1 million from late 2022 to August 2023. Since then, there have been the following developments.
- New contract wins - £67k (Verizon, Spyglass & Health-e Systems)
- Other committed wins/expansions expected to close imminently (£171k) – not guaranteed
- U.S. Air Force & Gen II Fund both renewed & expanded
- Total contract renewals & expansions - £161k
- Net Dollar Retention (NDR) rates remain strong across all channels (rolling three-month NDR 116% for direct customers & 94% for marketplace customers)
Pipeline & imminent wins
- Current pipeline $2.9 million (+19% vs. March 2023)
- Final stage negotiations with DARPA (R&D Arm of the U.S. Dept. of Defense), LMOC (Training division of the U.S. Air Force) & Cyber Command (Cyber Warfare division of the U.S. Department of Defense).
- Key partnership signed with Spyglass (provider of expense management solutions to over 14,000 clients in the US & Canada).
Current trading and financial forecasts
Hyperglance reports to a 31 March year-end. In its latest accounts to 31 March 2023, it showed net assets of £1.4 million and accumulated losses of £7.2 million.
ARR is projected to grow from approximately £1 million (including imminent contract wins) to £1.7 million by March 2024 – not guaranteed. The ARR growth projected up to March is expected to be driven by conversion of existing direct pipeline and new deals through existing partnership arrangements.
The Company aims to achieve monthly EBITDA profitability by mid-2025 and be cash generative – not guaranteed.
Management projects that the business will grow to 591 clients by FY28, generating £49 million ARR and £13 million EBITDA – not guaranteed.
To achieve incremental growth, Management expects to raise an institutional funding round within the next two years. Capital and associated future dilution are not included in the forecasts as presented.
There is no debt in the business and the forecasts do not call for debt to be added.
For detailed financial information, forecasts, and assumptions please refer to the Financials, Capital Structure and Target Returns Overview.
Hyperglance is seeking to raise up to £3 million under EIS. The Company aims to close £1.5 million by Q1 2024. Should ARR growth materialise as forecast, the remaining £1.5 million may be delayed until Q4 2024 while the Company considers valuation.
Investors in this round will subscribe for Ordinary Shares at a price of 40p per share at a fully diluted pre-money valuation of £16 million (inclusive of performance-linked option pool).
There is a single class of share in issue and investors in this round will rank parri passu with all other shareholders.
EIS Advance Assurance was received in August 2023 and EIS certificates were last issued in September 2023.
Capital raised in this round is expected to be deployed largely towards sales and marketing and customer success (68%) with the remaining capital used to build compatibility with Google Cloud and other R&D (32%).
Funding to date
Total investment to date has been £9.3 million.
The current ownership structure can be summarised as:
- Founder, Board and Key Staff: 15%
- High net worth investors owning >5%: 17%
- High net worth investors owning <5%: 46%
- Wealth Club Nominees: 2%
- Other staff options: 20%
Options are performance based and linked to the forecasts presented in this round ensuring that management and shareholders have strong alignment.
For details of previous funding rounds and the full capital table please refer to the Financials, Capital Structure and Target Returns Overview.
Target returns and exit
Management is targeting an exit in the next 3 to 5 years – not guaranteed. They consider the most likely route through private equity or a trade sale to either a strategic buyer or a competitor looking to expand into the government/defence market. They are in the process of establishing relationships with key B2B SaaS investors such as Vista Equity Partners. Hyperglance has been invited by Vista to pitch to its portfolio companies. Vista previously sold cloud management company Apptio to IBM for $4.6 billion in 2023.
The M&A market in the sector has been active in recent years with the acquisition of close competitors CloudCheckr and CloudHealth for an undisclosed amount and $500 million respectively.
Predicated on achieving its forecasts, based on current deal multiples, the Company believes it could be valued at up to £200 million in FY28 – not guaranteed.
For detailed returns analysis please refer to the Financials, Capital Structure and Target Returns Overview.
Senior management team
- Steve Robinson (CEO & Board member) is a technology sales professional with 18+ years experience in Cloud software at Fortune 500 companies – including three years as Global VP Sales at Arrow Electronics where he helped grow cloud sales from $200 million to $1 billion and most recently CRO at ORock Technologies.
- David Gill (CTO) has been with Hyperglance from the start. He has been instrumental in building the Hyperglance platform and has a deep understanding of the technology. He is an expert in cloud and virtualisation technology.
- Stephen Lucas (Chief Product Officer) is a Cloud Strategy and Product Management professional with more than 20 years experience across Cloud, eCommerce, Payments, Supply Chain and Financial Services. As CPO he is responsible for product development and marketplace and channel partnerships. Stephen joined Hyperglance in 2022 having worked with Steve Robinson nearly 10 years – most recently at ORock Technologies.
- Paul Lantsbury (CFO) is a KPMG-trained chartered accountant and CFO with more than 25 years experience. His career includes 6 years at Gillette and 4 years as CFO at Moonpig where he helped scale the business from $2 million to $50 million revenue and exit for $150 million.
CEO, Steve Robinson, is joined on the board by Stace Hipperson (founder) and Andrew French and Kirti Patel (Non-executive directors):
- Stace Hipperson (Director and Founder), previously CTO of Intergence Systems, founded Hyperglance in 2011. In 2022 he stepped down as CEO following Steve Robinson’s appointment. Under Stace’s leadership, Hyperglance built its enterprise software solution and scaled to c.£1 million ARR. Stace has over 25 years experience in IT infrastructure and cloud computing and continues to add valuable insight.
- Andrew French (Non-executive director) has more than 30 years’ capital markets experience, including 18 years at JP Morgan as an Executive Director. Andrew is now an active angel investor and brings his experience and network of high net worth investors to the business. Andrew is Hyperglance’s largest shareholder.
- Kirti Patel (non-executive director) has more than 30 years of investment experience spanning hedge funds, mid-size investment banks and family offices. Kirti is a shareholder in Hyperglance and has been actively involved in the business’ strategic decisions for several years.
Note – the Company plans to appoint a chair following this round. Wealth Club has introduced a high-profile US tech leader.
Risks – important
This is a single company offer with no diversification. It involves investing in an early-stage, loss-making 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.
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.
All the services Wealth Club and, where applicable, its subsidiaries provide are governed by the Terms and Conditions of the Wealth Club Services.
Hyperglance has demonstrated product market fit in and is building a niche in government and defence organisations as well as more widely in large corporations.
The management team is highly experienced and well aligned to maximising shareholder value. It could be well placed to achieve the growth potential of this product and is very much growth and exit focused, in our view.
If management can execute the business plan, Hyperglance could grow to be an attractive acquisition target and is already on the radar of large investors in the space like Vista – not guaranteed.
We consider this to be a compelling, albeit high-risk, EIS investment opportunity although as usual, you should form your own view.
Register your interest – No obligation
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.
- Single company
- Target return
- Funds raised / sought
- £1.0 million / £1.5 million
- Minimum investment
- 3 Apr 2024 for next close