company presentation
Veeqo is a software (supplemented by own hardware products) for e-commerce companies and online shops. Veeqo offers companies ways to streamline their inventory and order management with Veeqo software, solutions for 'pick and pack' orders and options to save on shipping costs. According to Veeqo's website, skincare brand Dove and Scottish startup Unicorn Brewdog count.
company valuation
Veeqo is loud Seedrs currently valued at £12.6MM (as of 05/2020). Veeqo is (unfortunately from an investor and transparency point of view) very reluctant to disclose financial figures. If you want to get an idea for yourself, you will find Veeqo on the secondary market Seedrs need to shop around to access the discussions and investor updates and draw your own conclusions from them. Personally, I'm pretty bullish on Veeqo's future. My guess is that Veeqo's MRR is currently at least £200k, so ARR has already surpassed £2.4MM. This is an unconfirmed estimate based on fragments of information available; the value of 2.4MM ARR became not named by the startup. I also think it is possible that there are still upsides here and the ARR is even higher. If my estimate is correct, then the sales multiple (compared to the company valuation) would be less than 5.2x - which in my view is a reasonably low value.
Involvement of VCs
In March 2019, the venture capitalist (VC) Octopus Investments invested £3.3MM in Veeqo – at the above company valuation of £12.5MM. The aim of this investment was to accelerate Veeqo's expansion in the US. In my opinion, being able to participate in Veeqo for the same company valuation today, i.e. 14 months after the VC investment, is definitely worth considering.
Conclusion: The US expansion offers further growth potential, a well-known VC is on board, the valuation multiple seems appropriate or maybe even low and the upward trend in online trading worldwide should continue in the long term despite (or perhaps because of) Corona. I am and will remain invested and will probably continue to increase my holdings via the secondary market in the coming months.
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Hello Philip,
Veeqo has now had another round of funding, valued at £15M.
I've also been invested since last year, but I'm not sure if it's worth going again, what's your assessment today?
Regards,
Ralph
Hello Ralf,
in the latest financing round, Octopus Investments was again the main investor. If a professional investor adds GBP 1MM, I think this is definitely a positive thing.
Unfortunately, the founder is very reticent about Veeqo's current annual sales. However, according to the November update, the growth rate in 2020 was good and my assessment is that Veeqo can continue to grow annually through organic growth and greater penetration of the target markets including the USA with over 50%. E-commerce sales are expected to continue growing over the long term, and I see Veeqo as well positioned. The current valuation is probably not a bargain with a very low turnover multiple. Veeqo is currently one of my top 10 investments by current equity value. Since I have 3-10 years of time, I will not reduce Veeqo at the moment and maybe even increase it slightly via the secondary market in the medium term.
As always, this is my personal opinion and expressly NOT a recommendation or advice. Many greetings
Philip
Hello Philip, I have just found your article about Veeqo. There is an interesting site called ECF Buzz, these guys are extremely pessimistic about… technikcally everything which is in connection to startups. I cannot blame them because there are plenty of examples when investors lost their 100 percent of their money.
So back to Veeqo, I have just checked what ECF Buzz said about them and the last update was this one:
Account Filing Date: Feb 2020
Profit/Loss: £-2.1MM
Comment: "Huge loss and despite new £3m investment still in deficit at YE which suggests either worse results than expected or management haven't a clue."
I know that this entry is a bit old and they usually update it after the new information appear into Companies House but It seems to me that they generate a huge loss. The question is whether they be able to make profit. If they don't spend everything on expansion?
That is why I hate that Seedrs not allows us to access to the older pitch decks because we cannot check the former financial predictions. I started to save all of them as you suggested in another article.
Have a nice day
Hey Martin, you already point out: The site is "extremely pessimistic about... technically everything".
That is exactly my opinion, too. I won't bother to find the 10% of truth and separate it from the 90% of possibly unjustified negativity. I've decided for myself not to use this source in general.
On Veeqo, there are newer accounts on Companies House: Period until February 2021 stating a loss of GBP 1.2MM and down from the 2.2MM losses the year before. Thus while not profitable yet, the direction of travel looks okay with losses cut in half year over year. Depending on startup and investor risk appetite it's always the question when to become profitable first versus when to go for higher growth and larger losses to then become profitable once better scale is achieved. I agree the 'high growth, high loss' strategy is riskier.