A CricHQ investment pitch obtained by NBR underlines an immediate goal to raise $US10 million ($13.7 million) – and underlines the Wellington-based company’s multi-billion dollar ambitions.
The pitch, which gives a pre-money valuation of $US77 million, follows a number of themes canvassed in a recent NBR profile but fills in a number of the financial blanks.
NBR understands CricHQ is looking to raise the money in the next month.
This will be its third time at the well.
The six-year-old startup initially raised $8 million from private investors.
In June last year, it raised $US10 million through a capital raise led by Singapore- based Tembusu Partners. Founder and chief executive Simon Baker would not comment on the size of Tembusu’s stake but a subsequent Companies Office update puts it at a modest 2.88%.
$US70m pre-money valuation
In an introductory email to the new investment pitch, executive chairman Mike Loftus says, “For this equity raise round we have a pre-raise valuation of $US70 million, which puts the current share price at $US33 a share. The current value of CricHQ has near doubled in the last year, as we have continued to contract cricket organisations and their members globally.”
$US70 million is a robust 47x the loss-making company's projected revenue for 2017.
CricHQ is now selling its service to cricket governing bodies in 50 countries – although Mr Loftus conceded in a September 2 NBR story that two of his key targets, Australia and England, are hold-outs.
Mr Loftus said CricHQ was still in a loss-making phase as it emphasised growth, and the figures in the investment deck reflect this.
It forecasts that in 2017, the company will make an operating loss of $US1.24 million on revenue of $1.5 million, with revenue steadily rising in the years ahead and profit from 2019.
It also reaffirms Mr Loftus’ comments to NBR about the scope of his company’s ambition, saying its ultimate revenue opportunity is $US10 billion a year. It envisions selling services not just to cricketing bodies but also to broadcasters, players and up to 500 million fans.
It also reveals plans to move beyond cricket, saying “CricHQ is working with NZ Football to scope and develop a football specific digital platform, utilising the core system and IP of CricHQ.” It notes there are 235 million registered soccer players worldwide.
Where the money's going
Money from the last capital raise was used in part to develop smartphone apps and post staff from 75 to 110 (31 are in Wellington, most of the balance in India).
The money it’s trying to raise this month would go in part to hiring more staff, developing relationships with broadcasters, a new fantasy league feature, payment processing and e-commerce abilities, expanding into other sports, and a new ability for users to overlay wagon-wheels and other stats onto video taken of amateur games.
The aim is to offer more features than any of its competitors, who include CricInfo, now owned by US giant ESPN (itself a division of Disney).
Largest shareholders today
As things stand, the largest shareholder CricHQ is MoneyBaker Holdings with a 47.47% stake.
MoneyBaker’s shareholders are ex-Black Caps captains Stephen Fleming (30%) and Brendon McCullum (25%), plus CricHQ founder Simon Baker (22.5%) and Lorna Baker (22.5%). Mr Fleming owns a further 3.31% through One Foot Forward.