Salus Optima EIS – full deal details
Offer now fully subscribed (29 April)
Salus Optima 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 with McLaren, the multi-£billion company behind one of the most successful teams in Formula 1: data-driven digital health platform with multi-year contracts with global corporations (including a US Fortune 100 company)
Millions of us make unhealthy choices – smoking, poor diet and exercise, excessive drinking, etc. Changing these habits could help prevent deadly illnesses such as cancer and heart disease. In costs to the NHS, it could save £11 billion a year.
Salus Optima ("SO" or "the Company") aims to address this in partnership with McLaren, the multi-£billion company behind one of the most successful teams in Formula 1 and also a world-leader in human performance and data analytics.
SO has developed a data-driven digital platform that uses artificial intelligence (AI) to give people closely personalised health guidance. It is akin to having your own personal trainer, nutritionist and life coach providing advice in real time – all via your smartphone or wearable.
Within three years of incorporation, SO has secured five major multi-year SaaS and distribution contracts with global corporations (including a US Fortune 100 company). Half of the £1.8 million sales forecast for this year is already secured through these contracts, which have the potential to scale significantly – high risk and not guaranteed.
To fund ongoing development, SO is now raising £3.5 million in a Series A round. £2 million is already secured from existing investors, and Wealth Club has an exclusive allocation of £1 million. It is only through Wealth Club that individual high net worth investors may access this investment opportunity directly.
Based on the company’s forecasts, mid-case target return is 10x (high-case 19.7x) in 5 years, after performance fees but before EIS tax relief – high risk and not guaranteed.
The deal at a glance
|Type||Single company EIS private offer|
|Stage||Early stage, global scale up|
|Date started trading||2018|
|Funding to date||£4.5 million (excluding the current round)|
|Co-investors||McLaren, Deepbridge, family office, founders|
|Sector||Personalised health and wellness technology|
|Fully diluted pre-money valuation||£33 million|
|Market size||$4.5 trillion|
|Business model||B2B and B2B2C|
|Revenue to date||£1.8 million forecast in current year, 50% already contracted|
|Revenue model||SaaS, software licences, product sales, recurring multi-year contracts with large corporations|
|EBITDA profitability forecast from*||2023|
|Forecast revenue in year 5*||£62 million|
|Forecast EBITDA in year 5*||£33 million|
|Target return in year 5*||10x|
|Target IRR*||59% IRR|
- Partnered with McLaren, a world-leader in human performance and data analytics
- Multi-year SaaS and distribution contracts with global corporates, incl. Fortune 100 company
- Partnered with NHS for UK clinical trials
- Highly experienced management team that has invested £1 million to date
- $4.5 trillion market and growing
- Extensive management, technology and commercial due diligence
- £1.8 million revenue forecast for current year, 50% already contracted – not guaranteed
- Potential for significant scale and highly profitable international growth – not guaranteed
- Minimum investment £18,795 (3,500 shares at £5.37)
- Mid-case target return 10x (59% IRR) high case 19.7x – not guaranteed
- Private single company investment with no diversification – high risk
This overview is based on the information available in the Information Memorandum prepared by the Company and additional information provided by the Management upon request. Wealth Club has reviewed the information provided and material contracts. However, Wealth Club has not 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.
What does Salus Optima do?
London-based digital health company L3M Technologies Ltd, trading as Salus Optima, was founded in 2018 by a team of serial tech entrepreneurs. They invested £1 million of their own capital to get the Company started.
That same year, the Company entered a technical and strategic partnership with McLaren, one of the most successful companies in Formula 1, which provides world-leading high-performance design and technology solutions for healthcare and wellness, and to optimise human performance.
In collaboration with McLaren, SO has developed a digital platform that combines high-performance data analytics and artificial intelligence (AI) to capture a wide range of data points and turn that data and behaviour analysis into personalised habit-changing advice which could prevent chronic disease. This sort of highly personalised support and conditioning is usually only accessible to a few, from the very wealthy to elite athletes.
To showcase its technology, SO recently launched its first branded product, BiaMother, which focuses on women’s health.
How does the business make money?
SO is a B2B business – it accesses end-users by selling its software and branded products to some of the largest companies in the world operating within the insurance, health, nutrition and wearables market.
Revenue is derived from the sale of multi-year software licences, multi-year SaaS and distribution contracts with large corporations, project build services, and own product sales.
BiaMother, SO’s first branded product, is already sold in 90 countries via Europe’s largest life insurance company and will be pre-installed in approximately 40 million smartwatches this year.
Within three years of incorporation, SO has secured five major multi-year SaaS and distribution contracts with global corporations (including a US Fortune 100 company). Half of the £1.8 million sales forecast for this year is already secured through these contracts, which all have the potential to scale significantly. In our view, should all existing contracts scale, SO could deliver its five-year forecast of £62 million sales and £33 million EBITDA even if it didn’t win additional clients. That said, SO has ambitious plans – three contracts with global companies are in advanced discussions already and are expected to complete this year – not guaranteed.
Covid-19 and Brexit impact
Other than the delay of some key meetings, the Company has not been materially impacted by Covid restrictions. Its workforce performed safely and well from home and commercial and technical progress has continued. Given its global customer base, the Company does not expect to be materially impacted by or exposed to Brexit.
EIS Private offer
SO is raising £3.5 million, of which £2 million has been secured from existing investors at a pre-money valuation of £33 million/US$45 million. For a short period of time, Wealth Club has exclusivity for £1 million. After that, it will move to first-come, first-served basis.
SO is an EIS-qualifying company with Advance Assurance. EIS certificates were most recently issued in December 2020, without any delays.
How is the funding going to be used?
Capital raised in this round will be deployed in building the tech team and further investment in data science.
Rodrigo Jesus, Founder and CEO, holds a degree in Engineering Mechatronics, complemented by his education at Harvard Business School in Marketing. He is a serial technology entrepreneur and a private equity investor in sectors such as financial services, insurance and healthcare, with extensive experience in launching start-ups in health and technology. He and his family have invested approximately £1 million in SO since inception. He has overall responsibility to deliver the business plan.
Dr Grant Allen, Data Officer, is a highly regarded technology industry leader, author and mentor, formerly at Google and Google Ventures and guest lecturer at Cambridge University.
Kris Shuttleworth, Human Performance, has joined SO from McLaren. He has a long career in UK life sciences, supporting and commercialising new technologies.
Eduardo Jacob, Technology, is an electronic engineer and serial entrepreneur, with over 30 years’ experience in building enterprise software and mission-critical systems for large corporations. He has the role of CTO.
This team is supported by a further 16 highly skilled technical employees and an advisory board. There is an Enterprise Management Incentives (EMI) scheme in place to reduce the risk of losing key employees.
McLaren Applied Technologies (MAT) – the company is active in a range of industries, including healthcare, pharmaceuticals, energy, transportation and consumer brands. Part of the McLaren Group, one of the most successful teams in Formula 1, MAT uses the skills, insights and experience gleaned from over 50 years of competition in one of the world’s most advanced data-driven sports.
Adrian Neilan, Investment Director, Technology, Deepbridge Capital. Deepbridge has invested £3 million to date in SO. It is an experienced investor in high-growth, scaling technology innovators. Adrian has an MSc in Computer Science (AI and Machine Learning) from Trinity College Dublin, an MBA from Dublin City University and is a graduate of the London Business School. He has gained considerable experience working with tech-focused innovations and developing business transformation strategies.
The Company is forecasting sales of £1.8 million for 2021. Half of this is already secured through the Company's existing five contracts, which all have the potential to scale significantly. In our view, should all existing contracts scale, SO could deliver its five-year forecast of £62 million sales and £33 million EBITDA even if it didn’t win additional clients – not guaranteed. See the full report and IM for more detail.
The Company’s most recent filed accounts to 31 January 2000 report brought forward losses of £2.4 million and negative net assets of £118k.
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 full investment pack – including the Information Memorandum which contains further details on the considerable risks, alongside the Wealth Club Risks and Commitments and our full research report. Please also read the Deed of Adherence and extract of reserved matters from the shareholder agreement (Wealth Club Nominees will be signing the Deed on your behalf).
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 pay no direct initial or ongoing charges. There is one share class in L3M Technologies Ltd. Wealth Club investors will be subscribing for the same share class as all other investors.
The Company will pay a fee of 5% of the funds raised to Wealth Club for arranging the offer. Wealth Club is entitled to a performance fee of 10% deducted from net proceeds, on returns on exit over 2x (before tax relief). Should this fee be triggered on exit, the amount will be deducted from Wealth Club investors share proceeds.
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 and is governed by the Terms and Conditions of the Wealth Club Services. The Schedule of Charges details the fees paid by investors.
Wealth Club Nominees Ltd will be completing the share subscription documentation on investors' behalf.
Wealth Club also charges the Company annual monitoring fees to prepare detailed trading updates for investors.
In our view, SO is an exceptionally high-potential, albeit high-risk, EIS company – it is rare to see a young company with such a solid and robust base from which it has the potential to rapidly scale (not guaranteed).
SO appears to have world-leading technology, products and team underpinned by multi-year contracts with its impressive customer base – including some of the largest companies in the world.
The business is highly scalable in our view and high margin and, if all goes to plan, we believe it could be worth more than the target returns presented in this report – high risk and not guaranteed.
As with all EIS, there are considerable risks. For instance, loss of key people or its strategic partner or a data breach could cause long-term damage and significantly delay the execution of the business plan. Experienced investors should form their own view.
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
- Healthcare & Technology
- Target return
- Funds raised / sought
- Minimum investment