@JohnDoe, Thanks for sharing this update. I am also Coconut investor but I havenāt got any updates from them. Could you please tell me the email Iād which they used to send the update so that I can ask them to add me ?
@tinku333 and @missponyta I am in the same boat. I recently joined an official FB group for coconut users called ācoconut biteā which offers some good information on progress and user feedback.
A good little startup which I do not use personally. I know others who do though and they love it! A good investment hopefully 
2 Likes
Iāve had a Coconut Account for a year now. Absolutely brilliant. When they incorporate VAT which is imminent it will be the icing on the cake.
I invested too.
4 Likes
Iām really happy with it so far also (been using it for a few months now). The only thing I canāt believe they havenāt sorted out yet is standing orders - itās a bit painful to transfer funds manually every month for things like wages, so Iāll be happy when they add those. I do find it weird that they rely on Facebook for their community, wish they had something they run themselves as thereās no way Iām joining Facebook at this point.
Iād also like to see them expand into providing accountancy services long term - I suspect for many small businesses they might be able to offer a good service based on their banking offering, or at least partner with an online accountancy with low fixed fees. Not sure what their plan is there but itāll be interesting to see it develop. A lot more is spent on accountancy than on business banking services, so they can probably make this work very well either as affiliates to accountants or by replacing them for the simple cases like freelancers and one-person Ltds.
3 Likes
Coconuts previous share price when they last raised was Ā£0.0154 so my small investment of Ā£200 nets me just under 13k shares
Iām confused as to why itās so low? Probably a n00b question 
Probably just a matter of liquidity. Much easier to buy their shares of your funds are low.
OK thought that might of been the case 
1 Like
Coconut: Highlights, Plans, Fundraising & Admin
samoconnor 15 minutes ago
2 Replies
Hi Everyone
I hope youāve had a fantastic summer!
This is quite an important update, so it would be awesome if you could take a look. There is a bit of admin for you to do which Crowdcube will be in touch about soon.
Iām getting in touch through the Crowdcube platform because Iāve been told that sometimes my update emails donāt get through. Iām sorry if you havenāt received any updates - I send them every few months.
If you havenāt received any, please let me know at invest@getcoconut.com and Iāll make sure we fix it.
In this email, I cover:
- 2019 Highlights
- Fundraising plans
- Our achievements this year and our future plans
- Shareholder admin
1. 2019 Highlights
- Weāve on-boarded 13,000 customers , tripling our customer base since the start of this year, representing month on month growth of 13% on average.
- Weāve been testing revenue streams, making Ā£126k this year so far and growing monthly recurring revenue with new features, revenue for August was Ā£27k. Weāre expecting to make Ā£300k this year, opening the revenue taps in the new year.
- 400 accountants signed up to our accountant portal, creating a viral loop where customers refer accountants and accountants refer other customers.
- Our team has grown from 8 to 20 in our London office and we have serious calibre on leadership team with the additions of Ness (Vanessa) Kent and Pete Finlay who joined us as a consultant and is coming on full-time, preparing us for scaling up.
2. Fundraising
The last 12 months have been an epic ride. Weāve hit massive milestones, had a few tough patches, built an exquisite leadership team and the momentum has just carried on building and building. Weāre very excited about our future impact on the world, and impatient to get there.
In light of that, weāre planning our next funding round to give us 18-20 months runway to deliver some key milestones. We will continue scaling in the UK and prove our US strategy for a larger round to scale internationally.
Weāre very grateful for our Crowdcube investor community. Youāre an incredible network of customers and supporters, helping us do everything from spreading the word to testing the product and providing feedback.
As a result, weāre dedicated to giving you another opportunity to invest in 2020 and are working towards this at the moment.
We arenāt going to do this immediately and I wanted to spell out the steps to getting there.
a. Advanced Subscription / Convertible Note - 2019
Through something called an Advanced Subscription or sometimes a Convertible Note weāre taking investment from a small group of investors. Weāre aiming to raise Ā£1m+.
The Advanced Subscription gives us a few things:
- It will let us get a little further along before raising a big round, with the aim of increasing the valuation when we do.
- The opportunity to bring some key strategic investors in that will bring huge value to the business, without waiting until next year.
This is good for current investors, founders and staff who hold options.
The advanced subscription will close in the next few months and will be offered at a 20% discount. The share price will not be decided until the next round closes. The discount is to acknowledge that the investors are coming in earlier and therefore the valuation is lower after the discount is applied.
b. Main Funding Round to close in early 2020
We plan to raise a round early next year through VCs, strategic investors and a few angel investors with the right expertise.
c. Crowdfunding 2020
Weāre planning another crowdfund on Crowdcube to make sure you get the chance to re-invest if you want to. We also want to open it out to the wider community too. There are many people who didnāt get a chance to invest in the last round who we want to give the opportunity.
3. Sounds good, whatās next with the business?
One of the most rewarding things about the last year is that weāve delivered on our plans:
- Weāre pretty much where we wanted to be with the product (but thereās lots more we want to do).
- Weāre close to hitting our ambitious growth targets with some sustainable and compounding channels (I think weāll end 2019 at around 20k customers vs. the 24k that felt like a mountain just 9 months ago).
- Weāve won a highly engaged customer base of 13,000 and a very active community.
- Weāve also built a super-duper leadership team.
Weāre now ready for the next phase of Coconut:
- Roll out throughout the UK using Open Banking as a platform.
- Properly switch on revenue streams.
Delivering the UKās first āpayment to tax return productā
Our first product was a current account that uses payments data to automatically categorise transactions for tax, gives guidance about the tax rules and has some handy tax features.
Since launch weāve:
- Created more incredible bookkeeping features like invoicing and VAT management.
- Created our Filings product for tax and accounts, passing these customers through our accountant partner network who we help grow their practice.
- Launched our Accountant Portal.
The Coconut Platform
Weāve also invested a lot of time in The Coconut Platform to augment our bookkeeping automation capabilities. The Coconut Platform contains the engine that drives our bookkeeping accuracy.
Rolling out our platform across the UK with Open Banking
Now the app and The Coconut Platform is working well and customers love it, weāre rolling it out throughout the UK. At the end of October, customers will be able to connect 15 different types of current accounts and credit cards to Coconut, like Barclays, Barclaycard, Monzo or Starling, Barclaycard.
The idea is that they can use Coconutās bookkeeping automation and tax / accounts filing features with any UK current account.
This transforms our ability to reach new customers, regardless of where they have a current account.
Weāre very excited about what lies ahead and glad to have you on-board for the journey.
4. Shareholder Admin
Hereās the bit to pay attention to as youāll be receiving various documents shortly and it would be great if you could take a look.
Crowdcube Process
You may already be familiar with the Crowdcube process, but Iāll explain it a bit for those that havenāt seen it before. (This does not apply if you invested more than Ā£20k - I will have been in touch directly.)
For those that invested less than Ā£20k your investment is held in a Nominee Structure (click to find out more) and Crowdcube manage the nominee on your behalf. In order to gauge how investors want to vote, Crowdcube has a process to request your approval for certain things. Then they will sign the documents on your behalf.
What does this consent approve?
As Iāve outlined above, we are committed to giving Crowdcube Nominee investors another opportunity to invest through the Crowdcube platform in 2020. Before we do that, we plan to close additional funds through an Advanced Subscription / Convertible note.
Weāre asking for your permission to take this investment on. The maximum amount approved will be Ā£2.2m to give us a bit of headroom above the Ā£1m target. We will disclose exactly how much we close afterwards.
We plan to come back for consent when we close the next round and the Crowdfund too, so you have visibility over whatās going on.
Written Resolution
As part of this process we will ask that everyone formally waives their āpre-emptionā rights for the Advanced Subscription. Pre-emption rights enable you to reinvest in proportion to your percentage shareholding. Weāre committed to giving you the option to reinvest through Crowdcube and will do so next year, so this process only waives the right for this particular round. This is a standard mechanism to avoid having to go to every investor each round.
This pre-emption rights waiver will allow us to close the Advanced Subscription and crack on with our plans for the next 2 phases of funding, one of which will be your chance to re-invest.
Shareholder Consent
As defined in our shareholder agreement, we require consent from shareholders and founders to issue new shares or securities (as is the case with the AS or Convertible Note, see above).
Thatās all from me.
Thanks
Sam
4 Likes
I donāt really understand this vote, can anybody explain?
What happens if I donāt vote?
Coconut need funds before the next official raise. As a business they have come to the view the best way to do this is via a convertible note without offering a pre-emption facility to existing shareholders. There are many valid reasons for doing this, including time pressure, cost of processing pre-emption rounds etc. Anyway according to the Articles of Association the company would be obliged to offer a pre-emption facility unless the existing shareholders agree to forgo these rights. As such the company wants you to vote to allow it to raise the funds without offering you a chance to invest in this round. Lastly Coconut have said existing shareholders will let the crowd participate in the round after this one.
Sorry, if this rambles a bit, Iāve tried to address it as best as I could. From my interactions with Sam ( Coconut ), I can say heās very transparent and was very helpful in the last crowdfunding round. So worth reaching out to him if you require additional details.
Disclaimer - The above is NOT intended as advice. You are encouraged to seek advice for your specific circumstances.
5 Likes
OK thanks - seems straightforward then
I dont like this as my existing share holding will be diluted. I really dont understand why Sam /Coconut canāt offer it to existing shareholders. If he needs to close the private round quickly then he can do it immediately and then can offer pre emption rights for crowd investors after that.
If I will take part in next funding round then I will lose out 20% discount which is being offered now for convertible also who knows it may be at higher valuation than convertible ceiling limit
Complexity in finance has always favoured the ones with more information on handālike the insidersāand/or the ones who took time to educate themselves.
Theyāre racing with some really fast moving ships https://monzo.com/business/ and https://www.revolut.com/business-accounts-made-easy, which offer Xero accounting integration already. And then thereās https://anna.money ā who are spending on bus and tube ads. But the market is huge.
Yeah I like Anna money tech potential and their in house marketing team. Also they have a very experienced team (formally part of Tockha). I think theyāve done well so far considering theyāve been trading for just over a year.
Got email for Revolut about free business account todayā¦
I really liked the messaging here - they have stated clearly why they want dilution and there is no attempt to present this is an unmitigated good for existing investors. Much better than the similar Monzo message.
I voted Yes as Iād like to see them grow and have the funding to do so before private money dries up. I imagine itās just a lot simpler to manage their crowdfunding separately and they have an investor who wants to come on board.
Interesting that they are moving to support lots of other banks as a feed of transactions - Iāve always seen them more as an accountancy play rather than a bank account, and there is certainly a lot more money in that. Accountancy is IMO an industry ripe for automation - there will always be room for human decisions and advice but much of the clerical work simply isnāt required.
3 Likes
Coconut: Poll Results, 20% Discount & Event Invite
The following message has been sent to you on behalf of Samuel Oāconnor of Coconut 
Hi Everyone
Hereās a quick update containing:
-
Poll results.
-
How you will be able to claim your pro-rata at a 20% discount before the round closes.
-
An invitation to our Open Banking launch on 6th November.
-
Poll results
Youāve all been voting in the poll and the results are in. The numbers were as follows.
Across our Crowdcube investor community represented by this vote:
- 59% of all Coconut Crowdcube shareholders voted
- 82% of these voted in favour of the plan
Across the full Coconut Platform Limited shareholder base:
- 83% approved
- 2% voted no
- 15% have yet to accept/reject
With more than 75% signed, the resolution has passed. Thanks for the support. We will crack on with the plan.
- Pro-rata at a 20% discount
Following my fundraising announcement, many community members expressed their desire to reinvest, which was very encouraging and a big vote of confidence. This reinforces the need to run another Crowdfunding campaign next year which weāre already planning.
We announced specifically that we will be running an āAdvance Subscription / Convertible Noteā round this year which weāll refer to as the āConvertibleā in this email.
There were concerns raised in relation to this about new investors coming into the Convertible round and getting a 20% discount when this option wasnāt available to members of the Crowdcube nominee.
No convertible instruments on Crowdcube
The reason we had to pursue this plan was because Crowdcube doesnāt allow a funding round unless there is a share price at the time of closing. This is because of their concerns about whether an investment in a convertible instrument is right for their investor community, which is mainly non-professional investors. I think this is an ongoing discussion for them.
Convertible instruments by their nature donāt have a share price, as itās agreed once the round closes and the discount is applied. This made it impossible to run a campaign around a convertible note or advance subscription on the platform.
Weāve noted that this isnāt the case on some of the other major Crowdfunding platforms. We decided internally not to run a campaign on another platform given the resource and time it will take up when we are incredibly busy launching feature for the tax season. Itās good to know this is an option for the future.
We have found a way to offer the discount
Despite these challenges, weāve now found a way to offer the same 20% discount to you as if you were investing in the Convertible before the next full round closes. Iām really glad to be able to offer this to you as it felt uncomfortable that a proportion of the community didnāt support the approach we were taking.
This wonāt be available until just before the full Crowdcube round next year, but we are going to make creative use of the pre-emption investment system that Crowdcube has in place.
The process
We will offer a pre-emption round for existing Nominee shareholders before we open the full Crowdcube round. You will be able to invest your pro-rata share of the final amount closed in the Convertible round once we know what this is. This will be offered at a 20% discount to whatever share price weāre closing at. There will also be a cap on the valuation that aligns with the Convertible terms.
Future rounds
This has been a very informative process and weāve learned a lot about the mechanics of the different crowdfunding platforms and what is possible.
The community has been really helpful in pointing out options and making connections. Crowdcube have worked hard with me to figure out creative ways to use their platform.
We will make sure we build this opportunity into all future rounds.
- Our Open Banking launch on the 6th November
Iām very excited about our future plans. We have some big feature launches coming up and we have a great team behind us with a highly engaged community.
I hope you can all make the Open Banking launch event on the 6th November. Weāll be sharing more about progress and whatās on the horizon.
You can book a free ticket here:
See you there!
Sam
1 Like
Did they just raise 33k?
I think the date is wrong and this actually refers to the discounted pro-rata round they did ahead of their crowdfunding last year.
1 Like