Free driving navigation app, Navmii, is in the middle of a Crowdcube campaign to crowdfund £1 million for its AI-fuelled personal assistant. Two days in, the app (valued at £25 million) had raised near £200,000. Techworld asks why it chose to crowdsource, and speaks to two UK startups that went a different route.
Navmii’s free mobile navigation app uses voice-guided navigation, live traffic information for iOS, Android, Windows Phone and Blackberry. It already has more than 26 million downloads and is available across 85 countries. It has proprietary mapping data and allows users to report problems in real-time, so they can alert other users of congestion.
The £1 million it hopes to raise will be invested in its deep neural network research, which gives Navmii the edge on sat-nav you can find in car dashboards. Using a phone camera, it will identify road signs and even lane departures, cyclists, police cars and alert drivers.
‘The UK is leading in the crowdfunding market’
Peter Atalla, Navmii CEO
The company is growing “pretty rapidly”, Navmii's CEO, Peter Atalla, tells Techworld. It employs 40 people in three office locations including London, San Francisco and St Petersburg in Russia, 30 of which are a mix of engineers and AI researchers.
Atalla used investment from his own company as well as friends for seed capital, and completed a Series A funding round with Talis Capital, an investment fund based in London. It raised £2 million. Now it is turning to crowdfunding - but not necessarily for the money.
Atalla says: “One of my friends raised money on Crowdcube a few months ago and told me the benefits. It is not just about capital for us.”
Navmii wants to gain from the marketing boost a crowdfunding campaign can bring.
“Millions of people use Navmii and its a good opportunity for them to become shareholders. Crowdcube gives you the potential to have thousands of investors singing your praises. It’s a good way to kick off the marketing that we want to do in the UK and expand our brand,” Atalla says.
‘We’re looking for £5 million in institutional funding’
Dennis Collet, Orderella CEO
Orderella lets thirsty pub-goers beat the queue across the UK and Ireland through its cashless app. It first launched in the UK in November 2013 and has grown from three to over 200 venues. Orderella has raised over £1.5 million in funding so far, out of its five co-founders pockets, and is now looking for £5 million series A funding. It has 15 full time employees, including six sales and marketing employees and four developers.
Dennis Collet, cofounder and CEO of Orderella, tells Techworld that the startup decided against crowdfunding because they needed more funding to scale their business.
“We thought we would do a £4 million series A funding round and £1 million crowdfunding campaign as we’re quite suitable for that platform. People understand the app, they feel engaged and it is really helpful for marketing. But we decided to go for institutional funding to scale Orderella as a business.”
‘Go it alone’
Eyetease the HP Go Global awards
Entrepreneur Richard Corbett first had the idea for his digital advertising business at the age of 24, walking around New York city where he noticed “there were strip club adverts in family brands in strip club areas. It just didn’t seem right in this day and age when there is technology to change it.”
Self-funded, and fresh from losing his job in fortune 500 venture consultancy, Corbett focused on making digital advertising relevant to locations, weather and time of day - with the rooftop of a taxi the perfect platform.
With just three employees, Eyetease now turns over $4.5 million per year and often cleans up at awards ceremonies like HP’s Go Global award, where Corbett and co took the breakthrough exporter of the year gong last week.
A partnership with the US’ networking giant Verifone in the bag, iTaxitop digital adverts can now be seen in cities across the world.
He says: “I still retain 100 percent ownership in Eyetease, I never diluted it and never raised money. Far too many companies are focused on raising,” he says.
“There is a culture of ‘you must raise’ but that has been lost in translation and people forget they need to focus on building a sound proposition and business case for their product and identifying the ‘need’ that should be addressed before fundraising.
“People forget about revenue model and make a trade-off by thinking ‘I’ll sell adverts when I get clicks to my site,’ they think funding will compensate for lack of funding model,” he adds.
A fan of “old-school business techniques,” Corbett’s path to profitability has been challenging, and having complete ownership was Eyetease's saving grace.
“It took four-and-a-half years to sign our first multi-million pound deal, four-and-a-half years to get approval for our technology. We overcame technical and legal barriers because Eyetease had never been done before.
“You can’t do that with a shareholder breathing down your neck. We have control, and we value that.”
UK vs US
Thinking of going abroad? Navmii’s Atalla says while the US is known for large-scale, exciting funding rounds, the UK is perfectly positioned for those who want to source funding from their target community.
“All the big and exciting deals are done out of San Francisco rather than London. But the reverse is true of crowdfunding. In the US you have Kickstarter, which is funding for a product, but you aren’t allowed to crowdfund for equity.
“At the moment, the UK is the only place to be if you are looking for crowdfunding,” he adds.