12 Jul 2016 07:00
FastForward Innovations Limited
12 July 2016
FastForward Innovations Limited
("FastForward", the "Company" or "FFWD")
Acquisition of additional 5.1% interest in College & Career Counselor App "Schoold"
The Board of AIM-traded FastForward is pleased to announce that FastForward's portfolio company, Vested Finance Inc. ("VFI"), an education technology provider trading under the brand "Schoold", has successfully raised additional funding of US$1,550,000 in a Series Seed-2 Preferred Stock ("Series Seed-2") financing, with significant participation from major Silicon Valley venture capital funds and other investors.
As part of this funding round, the Company has today subscribed for 798,374 shares of Series Seed-2, representing a 5.1 per cent. interest (on a fully diluted basis) in VFI, for a total cash consideration of US$700,000 (the "Subscription"). The Company has funded the Subscription from its existing cash resources. FFWD's investment of US$700,000 brings FFWD's total per cent. ownership in VFI, including its prior investment, to 12.3 per cent. (on a fully diluted basis). VFI may raise up to a total aggregate amount of $3,000,000 over the 90 day period following the closing of this funding round.
The valuation of VFI for the Series Seed-2 financing is US $12,225,000 pre-money. The terms of this investment are substantially similar to those of FFWD's previous investment in the Series Seed-1 Preferred Stock of VFI (see FFWD's announcement dated 26 January 2016 for additional information), including VFI's representations and warranties to investors and the voting, liquidation, anti-dilution protection and other rights of the Series Seed-2.
Additional Investors:
In addition to the Company, other Series Seed-2 investors include some of the most recognized and successful firms investing in the education technology sector, including Social Capital, University Ventures, Learn Capital, and Professor Joe Grundfest of Stanford Law School.
Commenting on the transaction, Lorne Abony, CEO of FastForward noted, "Schoold's progress these past five months has been nothing short of spectacular and it is no surprise that others have taken notice. The new investors in this round are some of the most successful venture capitalists in the world, including some of the best minds in both education technology and early stage investing. I expect these new shareholders will prove to be tremendous additions to the Schoold team, and, by extension, FastForward and its shareholders."
Schoold update: Achievements since original FFWD investment
VFI has provided the following update:
Since FFWD's last investment, Schoold launched globally in March 2016, and has since quickly become the market leader in iPhone and Android app store rankings (#1 in college search), user reviews (4.6 out of 5.0), and total installs, recently surpassing 1,000,000 total installs.
Prospective undergraduates in three months have collectively engaged with content over 2.3 million times (e.g. via swiping), checked over 10 million college statistics, and viewed over 2.5 million university or college profiles within the Schoold App. Additionally Schoold has achieved significant improvements in unit economics and engagement since launching in February, including:
1. Cost of domestic (U.S.) user acquisition has declined from over $2 per user to under $.70 per user, thus matching already low CAC trends for international users;
2. Organic (unpaid) installs has increased from below 100 per day to over 1200 per day as of June 2016; and
3. Monthly active users have grown from less than 2,000 on iOS to over 50,000, and monthly active users on Android have sustained at levels of 55,000 as of May 2016.
Related Party Transaction:
Mr Lorne Abony and Mr Stephen Dattels, directors of the Company, are interested in approximately 60 per cent. and 5 per cent. respectively of the outstanding stock of VFI prior to the Subscription. Accordingly, the Subscription is a Related Party Transaction under Rule 13 of the AIM Rules for Companies ("AIM Rules"). Mr Stephen Dattels interest in VFI is held by Regent Mercantile Holdings Limited ("Regent Mercantile"), a company owned by a trust under which Mr Dattels is a potential beneficiary. Mr Ian Burns, also a director of the Company, is a Director of Regent Mercantile so is also not regarded as independent for the purposes of the transaction.
Accordingly, Mr Jim Mellon and Mr Bryan Smith are the independent directors of the Company for the purposes of the transaction (the "Independent Directors").
The Independent Directors, having consulted with Peel Hunt LLP ("Peel Hunt") in its capacity as the Company's nominated adviser for the purposes of the AIM Rules, consider the terms of the Subscription to be fair and reasonable insofar as the Company's shareholders are concerned. In particular, the Independent Directors noted that:
1. the Subscription is being done on the same valuation as the investment round completed on 26 January 2016, which was supported by a 3rd party valuation report by a California based, technology focused, experienced firm of independent valuers;
2. Schoold's operational and financial performance has exceeded expectations since the January 2016 fundraising round was completed; and
3. also participating alongside FFWD in the Subscription, on the same terms, are three highly credible professional investment firms who have backgrounds in early stage educational technology and who have undertaken due diligence into this investment opportunity.
Further information regarding Schoold is available from its website at www.schoold.co.
For further information on the Company and its investments please visit www.fstfwd.co or contact:
FastForward Innovations Limited info@fstfwd.co
Josh Epstein / Ian Burns
Peel Hunt Tel: +44 (0)20 7418 8900
Dan Webster / Adrian Trimmings / George Sellar