Jiva EIS

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Jiva EIS is now fully subscribed – no additional applications can be submitted. 

There are a number of EIS offers currently open, both EIS funds and single company EIS. 

Co-invest alongside Development Bank of Wales and sector specialists in MedTech that could save the NHS millions through more accurate prostate cancer diagnosis

Prostate cancer is the second most common type of cancer in men globally. Early treatment has encouraging success rates but diagnosing the disease remains problematic and reliant on a radiologist’s subjective judgement.

To address this, Jiva.ai Limited (“Jiva” or “the Company”) has developed a non-invasive solution that can slot in a radiologist’s workflow. Jiva’s platform applies artificial intelligence (AI) to multiple data inputs to help radiologists detect prostate cancer with better accuracy (90%+) and more quickly, increasing patient throughput by 30%.

Jiva's technology has so far been validated through a dataset of 500 scans (300,000 images) and a further trial is to commence in Q2 2021. 

Now, to support the application for regulatory approval in UK/US, expected by Q1 2022 (not guaranteed) and move to commercialisation, Jiva is raising £1.1 million under EIS. £600k has been committed from private investors, Development Bank of Wales (“DBW”) and sector specialists Consilience Ventures. Funding from DBW and Consilience Ventures is conditional on an additional £500k being raised in the funding round. Investor funds will not be allotted until this minimum is reached. Wealth Club has an allocation of £500k. 

Investing at this early stage means the rewards could be significant, but so are the risks. Based on the Company’s forecasts, target mid-case return is 18x (IRR 78%), high case 29x (IRR 96%) after five years (after performance fees and warrants but before EIS tax relief) – high risk and not guaranteed.

Important: The information on this website is for experienced investors. It is not advice nor a research or 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, so you could get back less than you invest.


The deal at a glance

Type Single company EIS private offer
Stage Pre-revenue
Date started trading 2019
Funding to date £0.4 million
Co-investors Development Bank of Wales, Consilience Ventures, private investors
Sector Medical Technology
Fully diluted pre-money valuation £2.5 million
Market size $3.3 billion, growing 13% per annum
Business model B2B
Revenue to date Pre-revenue
Revenue model Initial testing projects followed by recurring SaaS revenues
Profitability forecast from* Q3 2023
Forecast revenue in year 5* £16.2 million
Forecast EBITDA in year 5* £7.5 million
Target return in year 5* 18x
Target IRR* 78% IRR
*These are forecast and not guaranteed. Capital is at risk – you could lose the amount you invest.

Highlights

  • SaaS MedTech company in rapidly growing prostate cancer diagnostic market
  • Potential revenue opportunities in other verticals from innovative platform technology 
  • Commercially experienced board with institutional investors
  • In our view, attractive pre-money valuation of £2.5 million
  • Mid-case target return 18x in FY26 78% IRR (high case 29x / 96% IRR) – not guaranteed
  • Private pre-revenue single company investment with no diversification – high risk 
  • Minimum investment £10,235.20 (80 shares at £127.94)

This overview is based on the information available in the Information Memorandum prepared by the Company in conjunction with Development Bank of Wales and information provided by the management team and/or Development Bank of Wales. Wealth Club has reviewed the information provided but it has not been verified or independently audited. Please read the offer documents carefully to form your own view and ensure you wholly understand the potential benefits and risks.

Jiva EISWhat does Jiva do?

Founded in 2019 by three entrepreneurs, Jiva claims to be the first provider of multi-modal AI for the health care sector. 

The adoption of AI in the sector has grown rapidly in recent years, to automate workflows and improve patient outcomes. 

Until now such AI models have been limited to one type of data input. However, diagnosing complex health problems such as cancers often involves considering multiple factors (and corresponding data inputs) at the same time. This is what Jiva set to develop. Its first application is JivaRDX, for the diagnosis of prostate cancer. Other applications are being developed in liver disease (IDLiver), and in white-labelling the platform as a service (PaaS) in itself. 

Jiva.ai represents the next generation in AI of applications in healthcare... and the need could not be more apparent than in the prostate cancer diagnostics space. Improving prostate cancer diagnosis at the scanning stage is one of the most underserved areas of research in terms of AI analytics. I am happy to fully support Jiva in their endeavours and have every confidence in the team's ability to deliver on a ground-breaking product.

Prof Prokar Dasgupta – Kings College and Guy’s Hospital clinician, top-10 UK prostate cancer surgeon

How does the business make money and acquire customers?

Jiva intends to target cancer diagnostic centres and hospitals in the US and UK. It estimates there are 351 such centres in the UK (public only) and 14,000 in the US. 

The US will be Jiva’s initial focus: it has already secured provisional agreements with four distribution partners/resellers ahead of – and subject to – receiving regulatory approval. These include Nuance – the $12.6 billion US multinational, which sells into 10,000 healthcare organisations worldwide. See the IM for further details.

In the UK, Jiva plans to leverage its network of key opinion leaders, including company scientific advisor Professor Prokar Dasgupta, recently named one of the UK’s top 10 prostate cancer surgeons. 

Jiva has developed early relationships with multiple NHS Trusts, including Leeds, Manchester and Nottingham – and the board has significant experience working with and selling into the NHS.

Jiva has market-tested pricing with cancer diagnostic centres and hospitals in the UK and US – these will initially sign up on a free trial basis, paying c.£26 per scan, before moving on to annual subscriptions (£30,000 / $48,000). 

Covid-19 and Brexit impact

Jiva experienced delays during 2020 as healthcare providers prioritised responding to the pandemic over trialling new software. However, Management believes the pandemic has accelerated the adoption of AI in healthcare and created a backlog of prostate cancer cases – increasing the need to make workflows more efficient and save healthcare providers time and money. 

Management does not anticipate Brexit to have a material impact on the business. The Company’s initial markets are the US and UK, and the requirements for Class 3 medical devices are expected to remain the same in the UK and Europe.

EIS Private offer

Jiva is raising £1.1 million in this funding round under EIS. £600k has already been committed from Development Bank of Wales, Consilience Ventures and private investors. Wealth Club has an allocation of £500k. The fully diluted pre-money valuation is £2.5 million. Investors will be subscribing for Ordinary Shares. 

A further £1.75 million funding round is planned in 2022, potentially targeting a higher valuation after achieving the key valuation inflexion point of securing regulatory approval. Timing, higher valuation and regulatory approval are not guaranteed.

The Company received EIS Advance Assurance from HMRC in February 2021, and most recently issued EIS certificates to investors in April 2020. 

How is the funding going to be used?

Funding in this round will primarily be used for platform development, regulatory approval, and staffing to help the business move to commercialisation.

Management 

CEO and co-founder Manish Patel is a technology entrepreneur with a background in biological sciences. Manish has a PhD from UCL in Mathematical Biology, and spent 10 years in investment banking before moving into CTO roles at two technology start-ups. 

CCO and co-founder Chetan Kaher is an entrepreneur who co-founded, grew and partially exited dental chain Smile Cliniq. Chetan is now a keen investor in healthcare and technology start-ups. 

COO and co-founder Sarah D’Souza is a law graduate, who spent 15 years in corporate banking before setting up FinTech start-up Idexis, a liability management and restructuring agency.

Board of directors

Non-executive Chairman Kevin McDonnell leads the board and is a health technology entrepreneur with 20 years’ industry experience. Kevin grew and sold VC backed Digital Healthcare, a leading provider of software to the NHS, to EMIS Group in 2013. Kevin now advises digital healthcare businesses. Please refer to the IM for further details of the board.

Development Bank of Wales

Since 2001, DBW has invested £800 million of debt and equity funding to support Welsh Businesses, including over £100 million in the year ending March 2020. DBW will have Board Observer representation on Jiva’s board, and the right to attend the Company’s monthly board meetings. DBW also reserves the right to appoint a non-executive director. DBW has conducted extensive diligence as part of its £250k investment in this round – covering financial, technology, management and route to market.

Consilience Ventures

Consilience Ventures connects high-growth businesses with its network of MedTech and FinTech sector specialists, investors and founders who provide capital and strategic input. Consilience Ventures has a dedicated MedTech investment committee, who performed extensive technical due diligence over Jiva’s platform technology and routes to market. Consilience Ventures has committed to invest £300k in this funding round, split 50/50 between capital and equity for services from its network of sector specialists.

Financials 

Jiva is still pre-revenue. Subject to regulatory approval, it forecasts to start generating revenue from its RDX product next calendar year and reach profitability from Q3 2023. By 2026, the Company targets revenue of £16.2 million and EBITDA of £7.5 million. These are forecasts – high risk and not guaranteed. 

Risks – important 

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

This investment is high risk so should only form part of a balanced portfolio and you should not invest money you cannot afford to lose. They also tend to be illiquid and hard to sell and value.

Before you invest, please carefully read the Information Memorandum which contains further details on the considerable risks, alongside the Wealth Club Risks and Commitments and Research Report. Please also read the Key Terms of the DBW investment, which will be formalised into a Shareholder Agreement upon successful completion of this round.

This is a single company offer with no diversification. It involves investing in an early-stage, pre-revenue, loss-making business, which is by nature high risk and prone to failure. You could lose the amount you invest.

The value of tax benefits depends on circumstances and tax rules can change. 

An exit could take longer than the three-year minimum holding period.

Wealth Club does not take a seat on the board so cannot influence the business the same way as is usually the case with institutional investors taking a full board position. 

Structure and fees

Investors will be subscribing for Ordinary Shares and will invest using a nominee structure provided by Wealth Club Asset Management Limited and Wealth Club Nominees Limited. This will be governed by the Terms and Conditions of the Wealth Club Services. 

Investors will pay no direct initial or ongoing charges. 

The Company will pay a fee of 6% of the funds raised to Wealth Club Limited for arranging the offer (Wealth Club Limited has the option to reinvest this via a warrant). Wealth Club Limited is entitled to a 10% performance fee on returns on exit greater than 2x subscription amount (before tax relief): the fee will be deducted on exit. Wealth Club also charges the Company annual monitoring fees to prepare detailed trading updates for investors. 

The Schedule of Charges details the fees paid by investors.

Our view

Jiva has spent two years developing and testing its innovative platform technology. The addressable market is sizeable and forecast to grow significantly. The Company now needs to move to commercialisation by securing further clinical validation and regulatory approval.

In our view, Jiva presents an opportunity to invest in a promising early-stage business at an attractive valuation with the benefits of EIS. This is a high-risk offer but returns could be significant for experienced investors willing to invest at this early stage alongside sector specialists. Achieving regulatory approval in the UK/US could be a key valuation inflexion point. As always, experienced investors should form their own view, and please remember you should not invest money you cannot afford to lose.

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
Healthcare & Technology
Target return
-
Funds raised / sought
-
Minimum investment
-
Deadline
CLOSED
Last updated: 9 April 2021

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