Intelligent Lilli EIS

Co-invest with West Hill Capital investors: digital health platform providing proactive remote monitoring for home care industry

There are around 12 million people over the age of 65 in the UK – nearly a fifth of the population – estimated to increase to 18 million by 2050. The consequent rise in age-related conditions will put additional pressure on already stretched health and social care providers.

These providers are now looking towards technology, such as remote monitoring care solutions, but so far these tend to centre around a reactive, alarm-based approach that identifies issues only after they occur – potentially sometimes too late.

Intelligent Lilli Limited (“Lilli” or the “Company”, previously Kemuri Limited) has built a powerful machine learning software platform that uses artificial intelligence (AI) to support safer independent living for vulnerable and older people efficiently and cost-effectively. The platform collects data via in-home sensors, monitors it and applies AI to identify health and care issues before they arise – based on previous data, behaviours and warning signs – providing care workers with valuable data, empowering them to prioritise when and where care is needed, streamline workloads at the same time as improving patient outcomes. 

The platform is now market-ready and the Company has so far made positive commercial progress in both public and private sectors from local authorities to care home providers.

Notably, Dorset County Council is already trialling the technology early results indicate this software-as-a-service (SaaS) contract could provide the Council with up to £3 million in cost savings per year and earn Lilli £1.2 million annual recurring revenue (ARR) – not guaranteed.

Lilli expects to commence a pilot in Q3 2022 with North Tyneside Council, which if successful could generate over £3 million of ARR – not guaranteed. They are in discussions with 14 other local authorities. 

In addition, the Company has secured an opportunity with home care provider Nottingham City Homes and has been accepted into the NHS procurement framework Spark DPS. Lilli has also secured channel partners, including health and social care sector consultancy Rethink Partners; management consultancy Newton; innovation and transformation consultancy PA Consulting; one of the UK’s largest providers of home care, City & County Healthcare Group; and is in final discussions surrounding a partnership with EY’s healthcare practice.

Wealth Club investors have previously invested in Lilli under EIS, at £2 per Ordinary Share, in a £3 million fundraise led by West Hill Capital in November 2020. 

The Company is now looking to raise up to £6 million of growth capital under EIS, at £4 per Ordinary Share, to help convert more trials into SaaS contracts and continue with commercial traction. Wealth Club has negotiated an exclusive £750k allocation for a limited period. The minimum investment is £25,000 (usually £50,000 through West Hill Capital). 

Based on the Company’s forecasts, the target return is 10.3x (59% IRR) in five years, before EIS tax relief – high risk and not guaranteed. 

Important: The information on this website is for experienced investors. It is not a personal recommendation to invest. If you’re unsure, please seek advice. Investments are for the long term. They are high risk and illiquid and can fall as well as rise in value: you could lose all the money you invest.

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The deal at a glance

Type Single company EIS private offer
Stage Growth capital
Date started trading 2016 (as Kemuri Limited)
Funding to date £5.6 million in equity from private investors (including Wealth Club investors), £0.1 million director’s loan and £0.2 million in grants and awards from Innovate UK, Surrey County Council and the EU
Sector Digital Health
Pre-money valuation £19.0 million
Post-money valuation £25.0 million (£29.7 million fully diluted after warrants and options)
Market size Current UK telecare market of £450 million, increasing at c.£10 million per year
Business model B2B
Revenue to date Pre-revenue (see Financial Forecasts Overview download for details)
Revenue model Recurring SaaS subscriptions to the platform
Profitability forecast from* Financial year ending December 2024
Forecast revenue in year 5 (2026)* £28.0 million / £32 million ARR
Forecast EBITDA in year 5 (2026)* £17.0 million
Target return in year 5 (2026)* 10.3x
Target IRR* 59%
*These are forecast and not guaranteed. Capital is at risk – you could lose the amount you invest.

Highlights

  • Large, rapidly growing remote digital healthcare market opportunity
  • Diverse customer base in both private and public sectors
  • Award-winning technology platform and management team
  • Pilot trial underway with Dorset County Council, with early success indicators
  • SaaS revenue model, forecasting £28.0 million / £32 million ARR and EBITDA of £17.0 million for FY26 – not guaranteed
  • Target returns of 10.3x – based on Company’s forecasts and not guaranteed
  • Pre-revenue single company deal with no diversification, high risk
  • Minimum investment £25,000 (6,250 Ordinary Shares at £4.00 per share)
  • Applications processed on a first-come, first-served basis
  • You can apply online – please note, you will also need to become an “elective professional client” of West Hill Capital before your investment is accepted

The overview provided on this website is based on the information available in the Private Placement Memorandum ("PPM") prepared by the Company in conjunction with West Hill Capital and information provided by the management team and/or West Hill Capital. Wealth Club has not reviewed, verified or audited this information. Please read the offer documents carefully to form your own view and ensure you wholly understand the potential benefits and risks.

Intelligent Lilli EIS – single company EISHow does Lilli work?

Lilli’s AI technology platform gathers, tracks and learns the normal patterns of behaviour, routines, habits and movements of vulnerable people in their own homes, by collecting data from its discreet sensor hardware – a “Lilli hub” – and typically up to five smart Internet of Things (IoT) sensors placed in a user’s home. 

These sensors monitor a wide range of indicators such as kettle-boiling, tap usage and motion such as door-opening, home temperature and power usage. The hub collects the data from the sensors and sends it to Lilli’s cloud servers, where it is analysed by the Company’s proprietary machine learning algorithms to spot subtle signs that may indicate a change in the user’s health.

In the event of an unusual variation in the user’s routine, the platform automatically alerts carers – enabling early intervention such as a visit or phone call, reducing costs of domiciliary care and potentially preventing unnecessary hospitalisation. The platform also provides real-time data on status and health conditions.

Some of the conditions the Company’s platform can potentially detect using these sensors are depression, cancer, alcohol dependence, stroke, dementia, learning difficulties, PTSD, anxiety disorders and obesity.

To protect the privacy of its users, Lilli does not use cameras or voice recognition. The Lilli hub works similarly to a wi-fi router but does not need an internet connection. It uses very little energy and is battery powered, so there is no impact on energy bills.

The Company has received a full patent in the UK and China for its Electricity Management Capsule, which allows data to be captured from any plugged-in device.

How Lilli works – a case study

Steve, a 67-year-old with chronic obstructive pulmonary disease, had a Lilli hub and sensors installed in his home. Six weeks later, the Lilli app alerted his social worker of a change in Steve’s normal pattern of night-time behaviour: he was getting up five times rather than two. Prompted by this insight, the social worker called Steve and then arranged for a community nurse visit. This prompted home tests that indicated the need for a change in his medication. Lilli enabled Steve to get help before the situation became more serious. 

The Company and its growth plans

The Company is based in Surrey and has recently won several awards – including Gren Paull winning CEO Monthly’s “CEO of the Year 2021", and the platform winning “Best Remote Monitoring Solution” at the Digital Tech Awards. 

In 2021, the Company changed its name to Intelligent Lilli Limited as part of a re-branding exercise, a pivot from a hardware to a SaaS software model, and a focus towards proactive and predictive care. It currently has 19 employees and three consultants.

It is building a pipeline of opportunities to sell recurring SaaS platform subscriptions – targeting local authorities, homecare agencies, housing associations, NHS Integrated Care Services and channel partners in the UK and internationally. Its initial focus is on the UK, Europe and the USA.

Once Lilli has gained further market traction and built up a body of data, it aims to move to a predictive care model. It anticipates an additional revenue stream to come from providing predictive data analytics to health bodies and pharmaceutical companies, giving them the necessary insights to support predictive care.

The Company’s goal by 2026 is to achieve approximately 50,000 Lilli users. It estimates this will deliver ARR of £32 million, potentially reduce social care costs by £341.5 million and save 1.23 million days of care practitioners’ time – not guaranteed.

Case study: Dorset County Council – trial results

Dorset County Council is currently doing a pilot trial, using Lilli’s technology across five social care teams caring for 100 people in their homes, with a view to increase to 500 users by the end of 2022. 

A key aim is to identify the potential to save the time and cost of monitoring elderly people. The pilot also seeks to delay entry to residential care and reduce the number of crisis affecting individual users. 

So far, the pilot’s estimated results indicate that Lilli could save 780 hours of occupational therapy time and £250,000 each year per 100 users. In addition, the need for fewer daily care visits to newly discharged patients could save up to £4,000 per person annually.

Private offer

The Company is seeking to raise up to £6.0 million at £4 per Ordinary Share – Wealth Club has secured an allocation of £750k for a limited exclusivity period. After that it will be first come first served.

The Company obtained confirmation of Advance Assurance from HMRC in January 2021 and has issued EIS3 certificates to investors in previous investment rounds. HMRC also confirmed that the Company is a Knowledge-Intensive company. 

Management believes that a trade sale to a larger company operating in the health technology sector is the most likely exit route. 

Based on its investment research, West Hill Capital has used an EV/annualised revenue multiple of 10.4x to calculate implied equity values for the Company based on the Company’s illustrative financial projections, giving a target return of 10.3x – high risk and not guaranteed. 

How is the funding intended to be used?

The capital raised in this round is expected to help fund the following:

  • Recruit product engineering, sales, customer support and service teams 
  • Establish and support important key channel partnerships in the UK and internationally 
  • Invest in R&D in IoT hardware and data science
  • Build inventory to meet demand, overcome supply chain issues and maintain scale ambition
  • Create and launch major brand and customer campaigns 
  • Attain further international approvals and accreditations. 

Predicated on a successful fundraise, the Company considers it will have sufficient cash runway for the next year. Thereafter, the Company may require further capital to develop and commercialise its products and technologies to deliver the forecasts. See the PPM for details.

Financials

To date, Lilli has been funded by £5.6 million of equity from private investors, a £0.1 million director’s loan and £0.2 million in grants and awards from Innovate UK, Surrey County Council and the EU.

The business is pre-revenue as at the year ending December 2021. Predicated on a successful fund raise, the Company forecasts £1.6 million of sales in 2022, growing to £28.0 million in 2026. Based on its current forecast it expects to reach profitability in 2024 and generate EBITDA of £17.0 million by 2026 –not guaranteed. 

The Company has a pipeline of opportunities that the Company anticipates will deliver the forecasts.

For further information, please download the Financial Forecasts Overview and the PPM to see further details.

Board and Management 

The executive team, led by CEO Gren Paull, has a strong track record in building successful and innovative health sector technology companies. Gren was previously COO of West Hill investee company Visionable, where he was part of a team achieving a 10x increase in the company’s valuation in two years. 

Nick Weston is Chief Commercial Officer, formerly O2’s public sector Enterprise Director. Chief Strategic Officer Kelly Hudson is a seasoned management consultant with experience winning nine-figure public sector contracts. 

In 2021, the Company made two significant hires: Chief Technical Officer Sameer Vartak and Chief Medical Officer Dr Rachel Melsom. Sameer is the former CTO of Limejump and Pockit, bringing a track record of building complex software products for fast growth. Rachel is a practising doctor at Worthing Hospital, West Sussex, and an advocate for preventative methods of patient care – her experience, network and insights have enhanced the Company’s credentials. For information on additional members of the management team, see the PPM.

The team will be supported by an experienced board led by Chairman Dr Leonard Anderson and Non-executive Director Harvey Mancey.

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 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 PPM which contains further details on the considerable risks – including, but not limited to, operating, technology, competition, market acceptance, product, employee, IP, data security, litigation and financial – alongside the Wealth Club Risks and Commitments.

Structure and fees

Investors will pay no direct initial or ongoing charges to invest. Fundraising costs are being met by the Company. Please refer to the Schedule of Charges for more details. 

To invest, you will have to qualify as an Elective Professional Client of West Hill. The investment will be held via a nominee structure through Aldbridge Nominees (Woodside).

Our view

Remote digital healthcare is a rapidly growing market, which has been spurred by the Covid-19 pandemic.

In light of significant cost and labour constraints on care providers and the increasing ageing population, technology is likely to be a crucial part of the future.

to enable elderly and disabled people to stay in their own homes, independently and for longer, rather than enter residential care. 

Whilst still at an early stage of commercialisation, Lilli has achieved good initial progress through pilot trials and is led by an experienced management team which has grown businesses before. 

If the Company can continue to build its customer base as planned – not guaranteed – it could be an attractive acquisition opportunity for a strategic healthcare technology trade buyer. 

Despite the progress made so far, there are considerable risks – 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 – 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.

The details

Type
Single company
Sector
Technology
Target return
10.3x (59% IRR)
Funds raised / sought
£3.0 million / £6.0 million
Minimum investment
£25,000
Deadline
17 Jun 2022 for first allotment
Last updated: 12 May 2022

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