News

Residential Property Logbook Chimni was today awarded InnovateUK Grant funding for a ground-breaking project to turn the construction data created during housebuilding into useful homeowner info.  The project will examine how to link the data and intelligence created during construction by the latest type of construction software (known as BIM) to the property logbooks given to homeowners.

Attachments:
Download this file (Press Release - RiBIM Award-Housebuilding.pdf)RiBIM Press Release[ ]59 kB

 

Chimni Launches SEIS Fundraise

Chimni has launched its first external fundraise, to support the next stage of our development.  This page contains an overview of the deal structure contained in the Term Sheet as well as answers to key questions around the deal.  There is a downloadable copy of our pitch deck at the bottom of this page. 

 

 See the 'Introduction to Chimni' video above.

 For more information on the Chimni SEIS fundraise, please email:  This email address is being protected from spambots. You need JavaScript enabled to view it.


What Are The Basics of the Offer?

Chimni is raising £150k in seed investment in return for 15% of the equity of Chimni Ltd, which holds all assets, IP and rights of the Chimni project. Our offer is based on a pre-money valuation for Chimni of £850k / post money £1M.  We have secured HMRC Advanced Assurance for our SEIS eligibility. The fundraise is scheduled to end on 31st March 2021.

 

What Is 'SEIS' And Why Does It Matter?

SEIS stands for 'Seed Enterprise Investment Scheme'.  It is a government initiative to give significant tax breaks and Capital Gains exemptions to incentivise people to support very early stage businesses.  Anyone investing receives a 50% tax break in return. The investor also benefits from a capital gains tax exemption on any profits that arise from the sale of shares after three years. The net impact is that for every £10,000 invested the capital at risk is only £2,750.  Investors are allowed to invest up to £100,000 in SEIS schemes each tax year.

There is more information and links to good sources of insight here:  www.chimni.com/seis-explained

 

How Did You Value Chimni For This Fundraise?

 We were heavily influenced by this article by SeedLegals founder, Anthony Rose.  It points out that valuing a seed stage company is very often a finger-in-the-air effort.   However, they surveyed over 1000 successful SEIS fundraises and created a value range that seems to make sense to investors and entrepreneurs.  Chimni is between the 'Launch' stage and the 'Traction' stage outlined in the article, which means we should be valuing the company between £850k and £1,500k.  We chose the bottom end of the range to reflect that Nigel Walley is still the only firm member of the management team, and that we still have to build a team to grow Chimni. We also felt that caution in the early valuation could reward initial investors and make it more likely that we can deliver increases in underlying value in future fundraising rounds.

SeedLegals article on valuing start-ups here:  www.seedlegals.com/how-to-value-your-company

 

Revenue Assumptions

In this pack we outline the top level revenue assumptions for the Chimni business case.  If you would like a Deep Dive into the Revenue assumptions, with examples of the first products we are bringing to market, please click go to this page here where there is a short video explainer 

Chimni Revenue Deep Dive  - www.chimni.com/revenue-deep-dive 

 

Why Haven’t Chimni Raised To Date?

We haven’t needed to. All work and activity on Chimni has been funded by Nigel Walley to date, with most ‘traction-building’ activity in the last two years not requiring outside funding. We now want to build on the opportunities that have developed through this period, particularly the opportunity to integrate with other industry software platforms and to launch trials of our first revenue generating services.

 

Why Are You Splitting the SEIS and EIS Fundraising?

As described above, the current valuation of Chimni for the SEIS raise is based on a standard low-ball approach for valuing early start-ups where market value can be unclear. This is to the advantage of the SEIS investors but we believe that, with the launch of the first product in the property market, we can offer a more rational valuation of Chimni’s potential. It is expected that this will be much greater than the current valuation, allowing us to deliver the SEIS investors an uplift in the value of their investment at the next fundraise (what is termed an 'up round'). 

We believe that three things will deliver this increased value:  continued growth in user numbers; a significant industry systems integration (eg with a large estate agency software, or with a Local Authority - see note on 'Trial Participation' in next section) and finally the successful launch of one revenue generating product (see note on 'First Product Launch' in next section).

  

What Will This Tranche of Funding Be Used For?

Funds from the current SEIS round will cover hosting and development for this 6 month period, which includes one permanent member of the Chimni team (Nigel Walley). It will also cover 6 months of scheduled software development projects which break down into four strands:


Code Audit – The Chimni app is running on our launch code base and as we move to wider distribution we need to review codes, frameworks and hosting before the next significant development. This work will produce a ‘state of play’ report that we will distribute to shareholders. 

Functional Improvement - The current Chimni code expects logbook owners to do a lot of uploading work. We want Chimni to be more immediately functional ‘out of the box'.  So we are focussing on a series of integrations with open data sets and complementary services that have become available over the last year, so that a new Chimni log offers a wider range of useful data and functionality with the owner having to do too much work.

Trial Participation – Chimni has been working with the MHCLG to organise trials of logbooks in the ‘home buying & selling’ industry. These are now being planned for Q1 2021 and we will need to integrate with estate agent and conveyancer systems to participate. 

First Product Launch - We intend to launch our first revenue generating service – the ‘Sales Pack’ for home sales. This product has been developed in conjunction with a data supplier - SearchAcumen – and is part of the conveyancing industry’s push to encourage sellers to prepare their Upfront Information before starting a sale. This product will be used for Chimni to participate in trials being run in conjunction with the Conveyancing Association.

 

 What Are The Major Project Steps Envisaged By The Plan?

The Pitch Deck (see page 20 in the .PDF document at the bottom of the page) lays out a Five Stage process to national roll-out.  The First Stage is now complete and we are preparing for Stage 2 between January and June.  This stage will involve our market test of our first revenue generating product (a 'Sales Pack').

 

What Are The Key Success Metrics For This 6 Month Activity?

While Chimni is available to anyone in the UK at the moment, we have not been focussing user recruitment outside London. This won’t change for the 6 months of activity envisaged in this SEIS raise. The activity forecast for Q1 and 2 in 2021 is intended to prepare the platform for a national roll-out in the second half of 2021. To that end we intend to use this 6 month period to:
• Complete the planned software development programme
• Trial launch the ‘sales pack’ product in London and the SE
• Participate in the industry trials we have helped organise in the ‘buying & selling’ sector
• Identify the management positions and candidates necessary for a national launch
• Appoint a small non-exec board 

 

What’s Chimni’s Burn Rate?

Chimni has been running an extremely lean basis and intends to continue doing so in the next development phase. This means that the monthly burn rate after the SEIS raise will increase in increments towards a monthly £20K, with spend split between admin/hosting, development and marketing. 

 

When Will Chimni Need To Raise Money Again?

Chimni intend to run a follow on raise using our EIS allowance to generate £500k to cover activities for 18 months starting at the end of the Q2 2021.  The formal part of this raise is planned to start on 1st April to last 3 months till end of June.  But obviously the informal marketing of it would start at the close of the SEIS process at the end of March.

 

What Will Be the Key Targets in the Next Block of Activity?

Chimni intend to run a raise using our EIS allowance at the end of the Q2 2021, to prepare for a national roll-out of services. 

 

Is Chimni a B2B or B2C Proposition?

At core Chimni is a B2C concept, with a vision for supporting homes throughout their lifecycle. However, we believe that in the early years of logbook adoption the main point of contact a consumer has will be through industry intermediaries (estate agents, conveyancers, architects) and non-profit intermediaries (local authorities, history and residents groups).

 

For more information on the Chimni SEIS fundraise, please email:  This email address is being protected from spambots. You need JavaScript enabled to view it.

 

Attachments:
Download this file (Jan 2021 - ChimniPitchDeck.pdf)Chimni Pitch Deck - SEIS Raise[ ]2589 kB

This article is offered in support of Chimni's SEIS Funding Round.  To return to the main article click here

What is the 'SEIS Scheme'

SEIS stands for 'Seed Enterprise Investment Scheme'.  It is a government initiative to give significant Tax Breaks and Capital Gains Exemptions to incentivise people to support very early stage businesses like Chimni.  SEIS was designed to boost economic growth in the UK by promoting new enterprise and entrepreneurship.    Anyone investing receives 50% of their money back as an immediate tax break.  On top of that, the investor benefits from a Capital Gains Tax Exemption on any profits that arise from the sale of shares after three years.  The net impact for people who pay tax at 45% is that for every £10,000 invested the capital at risk is only £2,750.  Investors are allowed to invest up to £100,000 in SEIS schemes each tax year.

There is a good explainer of SEIS on the Wealth Club website here:  www.wealthclub.co.uk/seis-explained/

Another good overview of the SEIS on SeedLegals here: www.seedlegals.com/what-is-seis

Return to the main Chimni Fundraising article HERE 

What Tax Breaks do SEIS Schemes offer

There is a mix of upfront and ongoing tax reliefs: 

  • Up to 50% income tax relief
  • Tax-free growth
  • Up to 50% Capital Gains reinvestment relief
  • Inheritance tax relief
  • Loss relief on exit

Our SEIS is timed to allow investors to seek the tax benefit before the April 5th cut off this year.   There is a good article on the SEIS tax relief on the Seedrs website here:  https://www.seedrs.com/learn/guides/seis-tax-relief

Crowdcube have done a good job highlighting a group of different investor outcomes here: www.crowdcube.com/seis-tax-relief-explained

There is another good overview on the Wealth Club website here: www.wealthclub.co.uk/seis-tax-relief

Return to the main Chimni Fundraising article HERE

How Is The SEIS Fundraise Managed?

Chimni is using the wonderful Seed Legals platform to manage the fundraising process.  SeedLegals is an award-winning investment platform and access to the Chimni Term Sheet and other information on the transaction is available through their site.   Investors will be invited to join the fundraising within the SeedLegals platform! We would encourage potential investors to review their service and set up a log-in here:

https://seedlegals.com/angel-investors/ 

The Term Sheets and Key Deal Terms are available to view through the SeedLegals platform and if you would like to review them please email:  This email address is being protected from spambots. You need JavaScript enabled to view it.  who will invite you into the system. 

Why does 5th April Matter

Chimni has timed their SEIS raise to allow investors to exploit the financial year end on 5th April.   By issuing shares before that date investors are able to claim their tax rebate against 2019/20 income.    If this is done, then it enables people to invest again after 5th April with a new 100k allowance.    Note: Chimni has put our cut-off date as 31st March as there is a weekend and a Bank Holiday just before Monday 5th April.   This will allow us to complete paperwork in time – however, our Term Sheet states that we can close the round early if the target sum has been reached.

Return to the main Chimni Fundraising article HERE

 

Hounslow Council have launched their first ever Digital Festival which will run throughout November. Over four weeks the event will feature 40 sessions, with headline appearances from some of the biggest names in the digital world – including Microsoft, Amazon and Google as well as local innovators like smart home app Chimni!

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  3. Chimni in the Sunday Times Property Section
  4. Chimni Launches Two Social History Projects
 
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