Medi2Data EIS

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.

VC-backed, rapidly-growing tech company enabling secure sharing of medical data – used by thousands of GPs and leading insurance companies

Each year, GP surgeries receive an estimated five million requests to provide patient medical data to ‘instructing parties’, such as insurance companies, solicitors and government agencies. 

The reasons for the request of information, or medical evidence, range from underwriting life insurance and reviewing personal injury cases to assessing a recruit’s health for the armed forces.

Currently, preparing and sharing patient medical data is a manual and time-consuming process – estimated to take 850,000 days of surgery staff time, and costing £180 million a year. It’s also very prone to human error, which can lead to poor patient experience – for instance, incorrect data could affect an insurance company’s decision and delay a critical illness payment.

Medidata Exchange Limited (“Medi2Data” or the “Company”) was set up to address this by Richard Freeman, who experienced first-hand the limitations of the current system as head of Capita’s medical evidence-gathering agency MDG.

Medi2Data spent several years developing technology to enable GP surgeries to share medical data with instructing parties quickly and securely.

Now used by thousands of GPs, Medi2Data’s technology produces electronic medical reports that can be automatically redacted of all non-requested data (thereby maintaining patient privacy in line with GDPR requirements). Additionally, the Company’s team of clinicians can provide GP surgeries with a fully outsourced medical reporting service: producing, clinically reviewing and managing medical reports on GPs’ behalf. 

The Company provides medical reports for leading insurance companies, including AIG, Legal & General Assurance Society and Aviva. Last year, it handled c.16,000 cases on behalf of instructing parties, on average reducing turnaround times by 70% and saving c. 80% in back-office costs.  

Launched in 2020, Medi2Data has grown rapidly and aims to dominate this niche market. The Company has recorded revenues of over £4 million to date, growing 147% year-on-year on average. It expects to reach profitability 12 months from completion of the round with annualised sales of £4.1 million, up from £2.1 million in 2023 – not guaranteed. 

To keep pace with demand, the Company is seeking to raise £1.3 million under EIS, of which £800k has been committed by existing institutional investors Symvan Capital and Greyfriars Investments, along with new high net worth investors. The remaining £500k is exclusively available through Wealth Club for a limited period.  

If the Company can successfully execute its plan, sales are forecast to exceed £43 million by Year 5, with EBITDA of over £11 million – not guaranteed. 

The minimum investment is £20,007 and, based on the Company’s forecasts, target return is c. 9x – not guaranteed. Investing at this early stage means rewards could be significant, but so are the risks. 

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.


Medi2Data-EIS.jpgThe deal at a glance

Type Single company EIS private offer
Stage Pre Series A
Date started trading 2020
Funding to date £4.5 million EIS funding, £0.3 million of grants and £0.2 million of debt
Investors Symvan Capital, Greyfriars Investment, Development Bank of Wales
Sector HealthTech
Fully diluted pre-money valuation £17.9 million
Market size £620 million (immediate addressable market)
Business / revenue model B2B SaaS
Revenue last 12 months £2.1 million
EBITDA positive from* 2024
Forecast revenue in Y5* £43.8 million
Forecast EBITDA in Y5* £11.5 million
Target return in Y5* c.9x
Target IRR* 63%

*Forecast, high risk and not guaranteed.

Watch: Medi2Data EIS – Testimonial from Caroline Brown, South Hermitage Surgery

 

Company by numbers

  • 12.5% of UK GP practices currently use Medi2Data software to produce reports
  • Used by nine major instructing parties, including insurers AIG and clinical research organisation Panthera BioPartners
  • Processes 6,000 requests per month  
  • £4 million revenue to date
  • 70% quicker turnaround time, c.80% cost savings
  • 90% customer retention rate
  • Multimillion-pound pipeline, including existing and new customers
  • Revenues from top 10 customers doubled in the last two years
  • 147% average year-on-year revenue growth since launch in 2020

Free research report

Download our free research report to read more on:

  • The market opportunity
  • The business
  • The product / service
  • Revenue model and route to market
  • Growth strategy
  • Current trading and financial forecasts
  • Target returns and exit
  • Management

Medi2Data – research report

Watch our interview with the Founder and CEO: Richard Freeman (recorded 20 Feb 2024)

 

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 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

In a short space of time, Medi2Data has demonstrated product market fit and sales growth. Its technology and service appear to have distinct advantages, notably the use of SNOMED CT enhancing its interoperability. Currently, there is no scaled competition and Medi2Data could be well placed to gain a dominant position in this niche market.

The management team has demonstrable experience in sectors relevant to the product, such as healthcare and financial services. The product could have applications in a range of markets, such as health & safety, credit referencing, insurance and private healthcare. If the Company can deliver the business plan, it could be an attractive acquisition target for buyers in a variety of sectors. 

We consider this to be a compelling, albeit high-risk, EIS investment opportunity – as always, 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. 

The details

Type
Single company
Sector
Technology
Target return
c.9x
Funds raised / sought
£1.0 million / £1.3 million
Minimum investment
£20,007
Deadline
8 Mar 2024 for 2023/24
Last updated: 9 February 2024

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