NewPath

STRUCTURESingle company deal
MIN. INVESTMENT£10,000
SECTORTechnology
CLOSING DATE26 February 2021
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Summary

NewPath is a fast-growing software company (4x revenue growth between 2019 and 2020) which is focused on helping to increase access to smartphones via instalment payments in emerging markets such as Africa and South East Asia. NewPath's patent pending technology can gradually reduce the functionality of a smartphone if customers don't pay on time, which incentives repayments and reduces the risk to financing companies and telecoms operators to offer handset financing.  

NewPath is expecting to hit a £3 million revenue run rate by February 2021 with good levels of EBITDA. The company also has a $3 million 4-year contract with development agency USAID to rollout it’s solution in West Africa to increase access to smartphones pre-loaded with agricultural services.

NewPath is backed by a number of VC firms and also a number of angel investors from the telecoms sector who've sat on the boards of telecoms operators which reach over 1.5 billion people. NewPath is also backed by a billionaire who owns two emerging market telecoms operators, a bank and a handset distributor. 

NewPath's team have significant experience in the telecoms sector - NewPath's CTO was previously CTO of the John Caudwell's Caudwell group which owned Phones4u and sold Singlepoint to Vodafone for £400 million, NewPath's CEO setup an SMS business which reached 4 million users.

Highlights

  • Scalable B2B2C route to market leveraging the distribution footprints of telecoms operators, banks and leasing companies.
  • Strong revenue growth in 2020 (4x compared to 2019) – May and June 2020 were the first profitable months, and the company is expecting consistent profitability in 2021 with a revenue run rate of £3 million expected by February 2021. (for detailed financial forecasts, please request access via the call back or message function)
  • £4.1 million in equity funding raised to date, including from strategic shareholders which own 2 emerging market telecoms operators, a bank, a handset distributor and a leasing company.
  • Solving a major pain point - over 1.7 billion currently don’t have a smartphone, the upfront handset cost is the largest barrier.

Market analysis

Market size 

1.5 billion smartphones were sold in 2017. 

$423 billion was spent on smartphones.

Global mobile internet penetration is expected to grow from 43% in 2017 to over 65% by 2025.

Problem 

Buying smartphones and tablets via instalments is not available to the vast majority of the world’s population. This is one of the key reasons that more than 1.7 billion people are still using feature phones.

Solution

Leasing to increase affordability by allowing users to spread payments for the device out over 12-month.

NewPath has developed technology which allows us to reduce the device functionality if leasing payments are missed: This feature incentives timely payments and reduces the risk of offering leasing to customers with no or low credit ratings, thus increasing access to smartphones.

Key team

Alasdair Chesney - CEO

Previously bootstrapped Send SMS, growing it to 4 million users. Alasdair funded NewPath by selling sports image right deals for 4 of the top 6 premier league clubs and several of world’s most famous sportsmen. Studied philosophy, politics and economics as an undergraduate at Oxford University. 

Tom Campbell - CTO

CTO of the Phones4u founder’s Caudwell Group during which Singlepoint was sold to Vodafone for £400 million. CTO of Movota (acquired by Bertelsmann), CTO of Mobcast (acquired by Tesco), CTO of Arvato which worked with Orange, Vodafone, T Mobile.

Exit strategy

It is expected that within 4 to 6 years investors will have the opportunity to sell their shares when the company floats/completes a trade sale or potentially in secondary share sales in a later funding round. There’s a number of potential strategic acquirers for the business including major smartphone manufacturers, financial service businesses and other companies who want to reach customers in our target markets.

Risks

Investment in the Company involves a high degree of risk. The value of investments can go down as well as up and you could lose part of or all of your capital invested. You should consider your investment in the Company to be a medium to longterm investment and that an investment into the Company is likely to not be readily realisable.

You should not rely on income from the company. If at all unsure, investors should seek independent legal, financial and tax advice before making a decision to invest. The Directors believe that the principal risk factors relevant to investing in the Company are as set out below. The following risk factors should be considered, but it should be noted that these are not exhaustive and not in any particular order of priority.

Potential Investors should be aware that the various tax advantages currently available might change in the future. This document is based on the understanding of the existing law and HMRC practice as at the date of this document. Future changes to the tax legislation may adversely affect the performance of the Company and the potential and actual return to the Investor.


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