Co-invest with West Hill Capital investors: growth capital for digital health company providing remote monitoring systems for care sector
Within the next 50 years a quarter of the UK population is predicted to be 65 years or older, at varying stages of the ageing process and functional decline. At the same time, the Covid-19 crisis has placed immediate additional pressure on an already stretched social care system.
Government health bodies globally are now looking to technology to help people stay living safely and independently in their own homes for longer, reducing the burden on the health system and public purse.
Kemuri Limited (“Kemuri” or the “Company”) is an award-winning developer of a leading digital health platform that utilises machine learning and innovative data analysis software to support safer independent living for vulnerable and older people in an efficient and cost-effective way.
The platform learns users’ normal patterns of behaviour by collecting data from a multitude of sensor data feeds – for example, it is designed to link to third-party devices such as Amazon Alexa, Apple Watch, Google Home and FitBit to monitor activity remotely, as well as deploying its own third-party sensor hardware. Kemuri can provide this layer of information – not currently available in the UK – to those giving care to people in their own homes.
In the event of an unusual variation in the user’s routine, the platform automatically alerts carers, enabling early intervention, reducing costs of domiciliary care and potentially preventing unnecessary hospitalisation. It also provides valuable information to decision-makers, demonstrating trends in the care and wellbeing of the population served.
Kemuri intends to sell recurring SaaS subscriptions to its platform to NHS hospitals and primary care trusts, local authorities, housing associations and retirement property managers. It already works with a number of local authorities and has recently agreed on a major strategic partnership with, Arrow Electronics (a $6 billion Fortune 500 company with annual revenues of $27 billion). This gives the Company immediate access to the largest public sector contracts, which management believes could rapidly accelerate its planned growth and see the potential to build a sizeable business – not guaranteed.
To fund its growth plan, the Company is now raising £3 million under EIS. This investment round is led by West Hill and £2.5 million has already been secured.
The Company is forecasting turnover of £25.3 million and EBITDA of £13.4m by FY25. Based on recent developments including new strategic partnerships, management indicated the potential to target £50 million of revenue in FY25. However, based on the illustrative assumptions in the Private Placement Memorandum and a potentially conservative EV/EBITDA multiple of 8x, the equity return targeted in 2025 is 10.7x (high risk and not guaranteed) before EIS tax relief.
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The deal at a glance
|Type||Single company EIS private offer|
|Stage||Pre revenue / early stage|
|Date started trading||2016|
|Funding to date||£1.4 million|
|Co-investors||West Hill high net worth investors|
|Fully diluted pre-money valuation||£5.1 million|
|Market size||est. $379 billion by 2024|
|Revenue to date||N/A|
|Revenue model||Contractual recurring subscriptions of licences|
|Profitability forecast from*||Financial year ending December 2022|
|Forecast revenue in year 5*||£25.3 million|
|Forecast EBITDA in year 5*||£13.4 million|
|Target return in year 5*||10.7x|
|Target IRR*||60% IRR|
- Large, rapidly growing digital health market
- Protected IP and differentiated tech
- Strategic partnership agreed with Fortune 500 company Arrow Electronics
- Limited capacity
- Pre-revenue single company deal with no diversification, high risk
- Minimum investment £20,000
- 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 before your investment is accepted
This overview is based on the information available in the Private Placement Memorandum 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 independently reviewed or verified the information included, the company forecasts or the deal details. Please read the offer documents carefully to form your own view and ensure you wholly understand the potential benefits and risks.
How does Kemuri work?
The case study below explains how the platform works.
Christopher is an older gentleman who lives alone. A local authority identified him as someone who would potentially benefit from Kemuri’s automatic alerting. Christopher agreed that a Kemuri K-socket could be put in his kitchen. The daughter received an alert as the socket had picked up that neither the kettle nor the microwave had been used that morning. Christopher had fallen in the night. She was able to get to him and provide help, which avoided him having to be hospitalised.
Covid-19 has seen global healthcare providers adopt digital technology at unprecedented speed and Kemuri looks potentially well positioned to benefit.
How is the funding going to be used?
The capital raised in this round is expected to fund the following:
- strengthening the development team to ensure the software platform stays ahead of technical developments
- building sales teams to establish channel partners and secure government frameworks
The executive team, led by CEO Gren Paull, has a strong track record in building successful and innovative health sector technology companies. Gren was most recently the COO of Visionable and tasked with all the foundations of the company from early 2018, including the financial rigour, controls and processes, pricing and modelling, legal review and was instrumental in its positioning and growth.
The management team will be bolstered by Nick Weston as Chief Commercial Officer after being Enterprise Director for all of Public Sector at O2 and Kelly Hudson as Chief Strategic Officer, a seasoned management consultant with experience of winning nine-figure public sector contracts. The team will be supported by an experienced board led by Chairman Dr Leonard Anderson.
The Company has been funded to date by £1.4 million equity and grants. In December 2015 it received EIS advance assurance and has issued EIS3 certificates in two previous investment rounds.
Kemuri is forecasting £1.4 million of sales in 2021 growing to £25.3m in 2025. The Company expects to hit profit in 2022 and generate EBITDA of £13.4m in 2025, not guaranteed. Please read the Private Placement Memorandum for further detail and growth assumptions and risks.
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 Private Placement Memorandum which contains further details on the considerable risks, alongside the Wealth Club Risks and Commitments.
This is a single company offer with no diversification. It involves investing in an early-stage loss-making and pre-revenue business, which is by nature high risk and prone to failure. You could lose the amount you invest.
If successful, funding in this round will fund the business to Q3 2021 when it plans to launch another funding round targeting a higher valuation. This is not guaranteed – if this funding is not secured this will impact the Company’s ability to deliver its forecasts.
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.
Investors are investing in the company directly, so will pay no direct initial or ongoing charges.
WHC will share a part of their fundraising fee with Wealth Club equal to 3.3% of the capital raised by Wealth Club. There are no other fees paid to Wealth Club.
Please see the Private Placement Memorandum for more details on fees.
Whilst the Company is still at a very early stage of commercialisation it appears to have proven and protected technology that can help vulnerable people stay in their homes for longer, possibly reducing health and social care costs. Digital healthcare is a rapidly growing market and Covid-19 may further accelerate growth due to demand for remote care solutions.
This Company is targeting returns of 10.7x (high risk and not guaranteed). You should read the Private Placement Memorandum carefully and form your own view on this single-company offer.
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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.
- Single company
- Target return
- Funds raised / sought
- £2.7 million / £3.0 million
- Minimum investment
- Limited capacity remaining