Blog

Since September 2017 I'm over Seedrs invested in 'The Cheeky Panda'. At that time the share price was £4.23 and the company valuation was £4.7MM. In June 2020, with the completion of the latest round of funding, the share price has now been increased to £36.0. The latest valuation is now £55MM. The share price and the company valuation have not developed exactly in the ratio 1:1, which must be driven by the fact that further dilution has taken place through the issue of new shares, eg as an option pool to incentivize employees. But the crucial point is the increase in the share price of 750% within three years. Today I can say that, looking back, this is one of my best investments.

company
'The Cheeky Panda' sells hygiene products such as toilet paper, kitchen roll, face towels, wet wipes, etc. The products are produced from fast-growing and therefore ecologically friendly resources, specifically from bamboo fibers. From my point of view, the founder Chris Forbes has lived excellent investor communication with his partner Julie Chen in recent years and made the right decisions to scale the company quickly and correctly. Here, too, it is true that excellently competent founders usually also publish good, regular and informative company updates for the crowd.

2020 - The Corona Factor
In 2020 the latest investment round was carried out, raising almost £2.4MM to fund further growth. This round was tactically placed at the best time when there was a real hype about toilet paper in the supermarkets due to Corona and the product was sold out practically everywhere for a few weeks. The inexperienced investor may recognize a trend in this and then invest in this 'innovative product' (note the irony, after all, toilet paper has been around for a while). Of course, it should be clear that sales in March to May 2020 can be strongly corona-driven and that there can then be a slight decline in sales until the corona sales are achieved again on a sustainable basis at a later point in time (through organic growth).

Company review 'The Cheeky Panda'
According to the 2020 pitch annualized sales are £7MM (data as of March 2020. If we generously assume actual sales to June 2020 over the trailing 12 months will also be around £7MM, the company is now valued at a sales multiple of almost 8 (55MM valuation divided by 7MM sales) This is a relatively high multiple and 'The Cheeky Panda' is no bargain, but the patient investor with a 2-4 year time horizon is likely to still make a profit if the planned IPO/ IPO is successful. The road to get there will certainly still be rocky and lengthy. However, I definitely trust Chris Forbes and his team to successfully handle the process. Given the scaling of the company that has already taken place, I suspect I that for the first time a small company profit can be written for the fiscal year up to June 2020. Thus, the further Wa Growth from the last round of financing and own cash flow can be lifted and the risk of a total loss is likely to be lower with 'The Cheeky Panda' than with a start-up that is still making losses.

Personal approach and investment assessment
Since 'The Cheeky Panda' is now my largest position in the portfolio due to the high increase in company value and I rate the new valuation as rather high, I will reduce my investment slightly over the next few months and thus realize the first profits. Investments in startups are and will always remain a high-risk investment. If I had little or no investment in 'The Cheeky Panda', then I would probably lose my position in this company in about 5-15 months Seedrs Gradually expand the secondary market. This is based on the assumption that there will still be some time before the IPO and that there is no rush to get involved due to the financing round that has just taken place. While Cheeky Panda is highly valued within the startup ecosystem, it is also a rather conservative investment in my opinion, as the company has already shown strength and can continue to grow on its own in the future.