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Latest update for the Sydney Angels Sidecar Fund 

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Sydney Angels Sidecar Fund 

Sydney Angels Deal Pipeline

The next Sydney Angels members meeting is on at 5.30pm Tuesday 30 October with 6 startups presenting at the Union, University & Schools Club, 25 Bent Street, Sydney.
 
The deals that will be presented have been selected from two Deal Screening Meetings:
 
1.     Inika – cosmetic products
2.     Pozible – crowd funding
3.     Wooboard – staff recognition system
4.     TheBestDay – social planning tool

Proposed Increases in the Paid-up Proportion

There are no proposed increases in the Paid-Up Proportion in the final quarter of 2012, however we do expect that the Sidecar Fund will drawdown a second round of capital from Limited Partners in the first quarter of 2013.

Portfolio Update


The Sydney Angels Sidecar Fund has completed its sixth co-investment in early stage ventures, investing alongside angel investor members of Sydney Angels. The six includes a second round investment in Sydney entertainment studio Bubble Gum Interactive. The Sydney Angels Sidecar Fund invested in Bubble Gum’s first angel round and participated in their recent $2.5 million raising.
 
The Sydney Angels Sidecar Fund’s portfolio includes equity investments in: 
  • Bubble Gum Interactive – an independent entertainment development studio whose first massive multiplayer online game for kids, Little Space Heroes, launched in December 2011, is played in more than 80 countries www.bubbleguminteractive.com
  • Controlabill - building a game-changing direct debit authority management service (Fund invested 21 August)
  • Ninja Blocks - a hardware and web-service platform that lets you control and build apps that talk to connected devices www.ninjablocks.com (Fund invested 11 September)
  • Jayride – a platform to find unique, cheap and fun land transport. Carpool, rideshare, bus, shuttle, relocation cars and more www.jayride.com.au (Fund invested 27 September)
  • StageBitz – a props management software company providing inventory tools for theatre, film and TV www.stagebitz.com (Fund invested 24 October)

Business Update - Bubble Gum Interactive (BGI)





Highlights
  • The recent Silicon Valley road show went well with invitations from several leading VC firms to keep in touch leading up to next year’s Series B
  • Have also had a very positive reception to cartoon concept at MIPCOM Junior – Turner, Disney, Fremantle Media and production firms Zodiak and DHX. Conversations to continue with key VP’s
  • Their mobile game “Jetpack Jinx” slated to launch mid-November on Android, followed by iOS. This is primarily intended as a brand driver to the virtual world. See development screenshots attached.
  • Little Space Heroes won more awards – securing the Gold Medal, Children’s Category and the Gold Medal, Social Networking in the 2012 W3 Awards
  • The Miniclip deal is in its final stages of being signed. The Miniclip promotional campaign will launch mid-November and will drive significant volumes Tier 1 users to our site.
  • The Turner deal is close to being signed. Combining TV and Online, this is planned to run from mid-December in UK, France, Germany, Poland, Holland and the Middle East.
  • The team continue to focus on accessibility-disconnect issues from last month with final phase implementation of various fixes expected to be completed by end of month after having recently migrated to the Amazon Cloud and High Winds CDN services. This phase includes third party audits starting next week to check accessibility fixes.
Market traction and growth
  • Growth has been intentionally slowed to allow us more time to complete further optimisation of the site and game to ensure minimal ‘leakage’ of users. This technical issue has impacted our performance but we expect to resolve the issues and then ramp up marketing activities (Miniclip, Turner, viral activities etc) which will drive traffic upwards and convert to paid members.
  • Sales continue to grow, in line with growth of Tier 1 base – albeit slower than projected due to reasons outlined above.
  • The MiniClip and Turner Deals are Tier 1 centric and will generate significant volumes from mid-November into early 2013.  
  • Cohort based analysis indicates that ARPU for paid members continues to track upwards. Our first cohort members are now at $48 and subsequent cohorts indicate similar levels of low churn.
  • The Terra deal is still in discussions, having been delayed by backlogs at the Terra legal/contract review team.
  • The Matchmove partnership has not led to the expected volumes, due to their network having significantly less traffic than was outlined to us. We are looking at ways to tap into their partners in SEA to attempt to drive additional traffic
Business Development and Distribution
  • InComm game cards launch in Australia/NZ on 1st December, in Brazil in mid-December and in UK in early 2013. This will give the game a retail point of sale presence in over 40 major retail chains including EB Games, Toys R Us, the Warehouse (AU/NZ); Argos, Gamestop,  Toys R Us (UK); Saraiva, Cultura and Fast Shop (Brazil). If the cards sell as well as expected, gross revenue for the company is circa $1.5 million for the three territories. Marketing in the UK and Australia will be supported by PR and television spots on Cartoon Network.
  • They continue to work with Ubitus a leader in cloud gaming and virtualisation to enable Little Space Heroes on the iPad and other web connected devices. They have just now completed the first round of QA and are extremely happy with the results, with plans to launch Little Space Heroes on tablets in the US, Korea, and China by end of year with consolidated billing to the users mobile phone bill. This will provide a significant distribution and monetisation channel not yet available to the competition.
  • The visit to the MIPCOM Junior Children’s Television showcase was successful with positive feedback from media owners and children’s television producers. They have received strong endorsement of the brand’s appeal as well as useful feedback to refine and focus its positioning. We continue conversations with these new contacts
  • The Silicon Valley meetings with VC firms went well, they received a lot of great feedback, making some great contacts for ongoing conversations leading up to our series B round in 2013.
Marketing and PR
  • The Space Heroes cartoon trailer has exceeded 340,000 views on our YouTube Channel. The success of the trailer has enabled us to be upgraded to a YouTube brand channel, an advertising free channel with direct call-to-action commands and links that will become a useful acquisition tool as we roll out additional content
  • Little Space Heroes has been named a winner in the W3 Awards, securing the Gold Medal, Children’s Category and the Gold Medal, Social Networking in the 2012 W3 Awards
  • They are working on a TVC to promote the game on cable and free to air beginning end of this year, as part of the Turner deal, they expect this to be finished by end of November.
Game Updates
  • Frightful fun awaits Space Heroes with Halloween updates launching this week and a solid roadmap of premium member incentives through end of year.
  • Further enhancements to the registration funnel and in-game early experience designed to increase engagement and retention.
Sydney Angel Sidecar Fund Investment
  • Cost of Investment $500,000
  • Book Value $900,000

Business Update - Controlabill



  • Controlabill's angel round was completed on 21 August
  • Product development is continuing via Advice Connect
  • The Controlabill website is undergoing redevelopment and will be relaunched soon
  • Appears that some utilities are starting to seriously push Direct Debit as their preferred payment method with their customers. Controlabill are tightening theirr Patents (via Australian Innovation Patents) to cover any potential breaches. They expect to have 3 Divisional Patents and 2 Innovation Patents registered in Australia by the end February 2013. The USA patent registration process is expected to follow the Australian patent registration process.
Sydney Angel Sidecar Fund Investment
  • Cost of Investment $150,000
  • Book Value $150,000

Business Update - Ninja Blocks

 




Highlights
  • All Kickstarter and pre-purchase orders have now shipped (>15,000 individual parts)
  • Delivering the closed beta version of the Ninja Platform
  • Creating a "real" product with 100% outsourced manufacturing
  • Filling key positions
Market traction and growth
  • Growth in the quarter was limited because Ninja Cloud was kept in private beta and limited sales of the original Kickstarter Ninja Block to a single batch (of 650). This was done for a variety of reasons including, (1) the first Ninja Block was not up to the quality standards of a retail product, (2) it was time consuming to manufacture and ship, and (3) it was not very profitable. 
  • Limiting access to the Ninja Cloud was a practical choice to give us time to scale infrastructure and also add more useful features.
  • We have ordered 1000 units of the new hardware which are in production now. They will be available for pre-order soon and will ship in November. The retail price of the new offering will be $200USD. This includes a Ninja Block and 4 wireless sensors in retail packaging. The total cost of goods sold per unit is still high at $107 USD, however there is significant room for cost savings with minimal change.
  • Interest in the hardware appears strong, we have 483 people on the wait list for the new Ninja Block, and anecdotal evidence suggests there is still strong interest. Early sales of the new unit will be telling.
Business Development and Distribution
  • Distribution deals are pending. They have been delayed pending the retail ready Ninja Block. The primary reseller (who is also the assembler) has been selected. Please note that the low margin at this stage makes standard electronics distribution difficult.  Industry standard margins for low volume electronic products are 40%, we can only go to 30% with the current price structure. The primary reseller has accepted 20%. 
  • A drive to acquire third-party hardware and application developers has begun.
Research and Development
  • R&D has been focused on the mass production Ninja Block. Achievements in the quarter included: 
    •   An injection molded enclosure
    •   Moving to a built in local wireless to improve utility and aesthetics out of the 
    •   Reverse engineering of off the shelf sensors for the bundle
    •   Retail packaging.
Marketing and PR
  • Ninja Blocks received exposure as part of theirr participation in:
          •  TechCrunch Disrupt September (Sponsored the hackathon) Sep 8-12
          •  Dreamforce (Presented session) Sep 18
  • Ninja Blocks have presented or are scheduled to present at:
         •  TwilioCon October 16-18
         •  WebDirections October 16-18
         •  NodeDublin October 18-19
         •  RealtimeConf October 23-24
         •  Tech23 October 23
         •  CascadiaJS November 8-9

Sydney Angel Sidecar Fund Investment
  • Cost of Investment $73,255
  • Book Value $73,255

Business Update - Jayride

 




Highlights
  • Raised $400,000 investment
  • Largest transport networks in A/NZ have signed up (Greyhound, InterCity)
  • Google, others, have expressed interest in Jayride transport data
  • Team size expanded to 6 people
Market traction and growth
  • Site growth (Unique Visitors, Contact Actions, etc) to forecast
  • Rate of new transport customer signups increases MoM.
  • B2B sales activity flat while closing financing, Google negotiation, hiring team
Business Development and Distribution
  • Potential deal with Google on Scheduled Coach transport data. Data quality approved. Currently negotiating commercial terms.
  • Similar deals with other App makers for wider inventory scope, at early stages.
  • More successful customer showcases with Rideshare transport networks
Research and Development
  • Jayride 1-week sprint deployment, constant improvement, continues
  • Major upgrade to Jayride transport repository (Creation of “JTFS”)
  • Launch of Jayride App for Facebook Pages
Marketing and PR
  • Longtail SEO and SEM strategy continues
  • Membership campaign drive using Facebook viral method very successful 
  • Cold email comms to Universities, Events yield warm sales leads
  • Offshore outbound lead gen yields warm sales leads
Intellectual Property Issues
  • Research done on IP issues surrounding transport data, all positive indicators so far.
  • Terms and supplier contracts are WIP with legal advisors
Key Personnel
  • Team size increased to 6, composition:
      •  Technical Development: CTO/Founder + 1
      •  Business Development, CEO/Founder + 3
Sydney Angel Sidecar Fund Investment
  • Cost of Investment $150,000
  • Book Value $150,000

Upcoming Members Meetings

30 October
11 December


 


 

 

 

 


 



 

 

 

 
 
 
 

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