Member Info for thechief1

Hey Toyin,

So churn tends to be calculated as a monthly churn (and I guess they don't have 12m sales yet so assumed they're talking monthly churn rate) on the total customer base (and as you grow the more critical it becomes which is why changes in it can be critical for company success) so you'd end up with something like this:

1 2 3 4 5 6 7 8 9 10 11 12
Churn Rate Acquisitions 3150 3150 3150 3150 3150 3150 3150 3150 3150 3150 3150 3150
31% Churn 0 977 1650 2115 2436 2657 2810 2915 2988 3038 3073 3097
Total 0 3150 5324 6823 7858 8572 9065 9405 9639 9801 9913 9990 10043

If the above doesn't come out correctly you can check out the google sheet here https://docs.google.com/spreadsheets/d/1rX6z9jZ0CW-j1v_Vpkq6oQeQZZHUHwnGrLP-t1agCII/edit?usp=sharing

What you've assumed is 70% of people stay for 12m basically (i.e. if you don't churn off you must stay with us) which isn't usually how you'd look at churn

Hope that helps? and always interested in other points of view

Cheers

@belgrano fair point and I think we are actually alluding to the same thing in that if we are able to look at these retention numbers with a little more granularity we might see a stronger picture ->

hopefully that’s something sbtx can provide in future updates !

The point I wanted to make though was that if you’re targeting say 10k active users in 12 months and you assume a linear acquisition of them ( yes maybe that’s not fair but for simplicity ) you need to acquire like 37800 customers (3150 a month ) to finish with 10,000 in month 12 …. But as you say the churn picture may be misunderstood currently if assessing the high level metric with also relatively small numbers / nascent into product launch

Still hoping to see some traction on all the other potential they have but I’m not sure they have the capability/ cash flow to do D2C to the same level I think they can comfortably do well in B2B - things can always change of course and I continue to hold (maybe even add ) as long term I think theres enough upside from many different avenues

69% retention actually isn’t great at all (run the model and you’ll see why ) - not insurmountable but not great … however what I think they should actually do is show “retention of those that experienced any benefit” which is likely much higher and then you realise that the 31% churn is over exaggerated as it more identifying the customers it works for not a product retention issue

Company has no clue on the d2c side , lots of experience on B2B - I’ll still hold but even their new appointment doesn’t understand D2C IMO

Yeah sales are about 100-150k I think based on reading the report about increases since influencer campaign etc (- should’ve read into that note of “remain achievable “ for what is was ( panic but hoping …)

How do we get into the podcast ?/ investor call ?

Yeah poor update and honestly I don’t put much value on the new non exec appointment either tbh - realistically her company is relatively small ( having personally run higher rev companies I can tell you it’s not the same playbook) and so her experience in my opinion will not change anything materially

Having said that the numbers they wanted to achieve for a direct to consumer subscription business always felt ambitious without marketing spend - as reiterated before I’d like to see them dig into a real performance marketing campaign and focus on a strong CAC/LTV as that kinda dictates how quickly you can drive growth

Anyway although a poor update product portfolio is still decent and sederma and toothpaste have potential too

Thanks for the replies @belgrano and @elrico

@belgrano- I would LOVe to attend an investor meet , do let me know where to find out about the next one - would be a lot of fun and interesting discussion among passionate folk :)

I’ve never posted too much on these boards ( lots of noise ) but found some interesting people here to have a good discussion with so thanks for that! I’ve gone from working at blackrock to start up Ventura so definitely think we could all exchange some notes and thoughts and hopefully make a few pennies whilst we’re at it !

Agree it’s a solid RNS

Having helped up an e-commerce company that once oversaw 1.5m USD monthly sales I can tell you that influencers are a bit hit and miss and a combined 1.5M reach is relatively small ( that doesn’t mean it doesn’t help and of course some companies like gym shark have essentially driven crazy growth with influencer marketing )

My personal view is ( I’m long btw ) is that paid marketing will be required ( but can result in a decent pace of scaling , important thing is maintaining a strong LTV/CAC ratio and paid channels are actually far more “reliable” - by reliable I mean it’s more math to some extent as to what you spend vs what you get out - than influencers so I’d be keen to see them leveraging BOTH and pumping behind that ) … second thing to think about is the discounts / promotions that will be need to be offered to get people in and whether longer term it will require a lower price ( or longer term discounts etc ) - thus conservatively I’d take an avg monthly spend of 30 quid and take a customer base on that ( ie 10k customers = 300k monthly = ARR of 3.6M ) . One further benefit of paid marketing is that if these guys have a relatively low churn rate then you can scale v v v rapidly as your LTV/CAC will still hold - just my 2 cents but overall think there’s huge potential here - would love to talk to their marketing people and have a chat lol

GL all

Putney lad Im a small holder here so generally want to see things work out here but to tell other people the thing is de-risked isn't accurate on an ads for equity deal mate? come on I get where you are coming from in your mind but that's from you as a holder not an pure objective view

yes mate - see my previous posts but its an ad for equity deal - brand capital side of HT try to do these lot -> Koovs had one with them years ago too

lets think about this in terms of market cap not shareprice..... a 357m market cap today makes no sense ..... having said that it's also higher than 30m So Hardman's attempt at DCF (sponsored by koovs) is moronic in this instance -> we should compare to what companies at this stage would be valued at (some mutiple of net revenue + kicker premium for top management and the assets/cash they have knocking around) -> Im neither super positive or negative on this one... I am holding a few and debting whether to sell a bit or just hold (not a large position)....sure India is a huge opportunity and these guys have a decent team but trading at something like 100P+ today makes zero sense.....there are companies (not public yet) with similar or bigger net revs and far better margin profile trading at lower valuations (think 4-5 x net revenue)....now of course in 5 years as many say here Koovs could prove to be an absolute winner I just want people to be aware as some guys on here chatting crazy valuations and some people will get taken in by this without knowing the full picture ... potential absolutely... a certainty.... not yet......and generally again Im not a fan of this ads for equity rubbish -> especially with HT.... a cash injection would have been awesome and yes this makes it more likely but for those of you that don't know e-commerce (again Im on the ground right now in India) -> spending that much with these guys for non guaranteed ROI marketing is a bit of a stretch..... I say if they had a similar deal with google and facebook id be a bit more pro the deal.... anyway again not strongly inclined either way yet, will wait and see but definitely going to be interesting one way or another :D - good luck to all

Maybe Jambon.... not sure its so clear as this is bound ot HT media - an ecom start up wit cash probably wouldn't spend so much with them (FB and Google would command significant spend - i.e. performance marketing) - good deal for HT because they get a double win (Ad inventory which they already mark u and a low-ish valuation) -> Koovs still need cash .... then secondly depends how much they can do with HT advertising inventory ( its not so performance focussed but have some decent stuff , e.g. i-diva, miss India)...Ive seen these deals tabled by HT to a few start ups and in some cases declined in some accepted .... So I'm not negative or positive here -> still scratching my head to figure out exactly how to digest (i mean i guess this would make cash funding more likely of course with this deal in place but it's clearly nowhere near equivalent to the same figure as a cash injection which would have seen the SP soar im sure)

Good news ...kind of.... this isn't cash :s - its ads for equity deal?? not sure what to make of this to be honest

Ajax62 I meant the process from start to finish i.e. initial call to money in account

unfortunately think thats unlikely to be significant at all but i do imagine you'll see some margin improvement... they've scaled back marketing pretty hard

they will definitely be in talks .... timelines for this kind of raise are 8 months + .... they obviously don't have anything signed but even with my healthy amount of skepticism I can tell you they're definitely in talks probably with a bunch of parties because anything less would be madness

Ok lets take a step back..... clearly we knew that this was priced to go busto and if they close the funding they get a second bite at the cherry so some valuation increase made sense.... However.... people talking of 50p+ a share - that gives you a market cap of around 150M GBP +.... and does funding really justify that??? I'm not saying it's not possible but please be realistic with these things.... even at a 5 x net sales multiple (which is extremely generous given the margin profile) we're nowhere near that.......IF they get the funding Koovs still has a lot of work to do - yes they've understood where they went wrong last time but no true value is added until they prove they can pull this off

OK guys , been a long time lurker never posted (on this forum) my background: few years in the city doing trading, then asset management then consulting -> now on the ground in India in the e-commerce space here's the short and thick of it -> being on ground here it very different to what you guys back home see in terms of performance, numbers and even competitive landscape. Koovs definitely got a few things right a lot of things wrong. I actually work closely with a company who has (not publicly listed) bigger private label than Koovs and deploted 1/8 of the capital but again it is not perfect there either and I have peronally met the Koovs team and they are strong management. Koovs have tried to hit India like the UK and ASOS-> this is the entire mentality that screwed rocket internet when they were here and meant they sold jabong at a firesale price, ->ASOS model is much harder in India due to coupons, smaller basket size, logistics cost still high etc. -> IMO Koovs although they did a reasonably decent job on the branding/marketing front failed to realise this and were caught in the fallacy of "GMV" ...now they have undrstood a bit better and want a second bite of the cherry but only after having done in the best part of 80mq quid...India is a unique beast and yes there is opportunity and those companies that can build a great india specific business model for the indian consumer will build highly valuable and profitable businesses - Demonetisation is frankly a scapegoat ( yes I agree it hurt pretty much every ecommerce company except for the ones it benefited like paytm and food delivery) because although it was VERY tough it probably set everyone back 4/5 months and increased discounting (due to excess inventory from poor sales) which although is horrible cannot be the sole reason -GST , agree it's been a disaster, long term very good, companies trying to get their refunds - this should however only hit cashflow not sales performance -I did read the hardman report but it was a lot of smoke to be honest, a couple of good points but it felt (cannot confirm) like it had almost been commisioned by koovs - koovs has a good "share of mind" of indian consumer target market and is finally getting a gross margin positive... it has a long long long way to go - overheads are massive and marketing efficiency is poor right now (though decreased spends should improve this) - at this price it's definitely a punt on the funding , and if they can actually build this thing... if they somehow get 50 odd million quid they've got a go of it (though i still think certain other indian ecommerce plays will do better fashion is not a winner takes all market) -> i do wonder how or from who they will raise this though at a strong price unless is waheed+friends and a convincing job... but lets see anyway wanted to just share a few thoughts and happy to answer any Qs cheers TheChief