In the immortal words of the dragons.....I'm out

 

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The numbers sound a bit odd to me, a company worth 27.5m trying to raise 250k on crowdfunding?? Why not just go to the bank? (and get lower interest rates) I'm assuming it's because they haven't got the assets as collateral; in which case if the banks won't lend to 'em then I won't!

 

What happened to the last lot of crowd funding money?

Pod Point

There be dragons.

 

What happened to the last lot of crowd funding money?

Pod Point

There be dragons.

So the implied valuation has gone from £17.75 million in March to £27.5 million now.

 

They're trying to raise about £2m, £250-500k crowdfunded and £1.5m as shares

 

I am not that risk averse in general, but sadly I wouldn't touch it with a barge pole. The more you look the more questions are raised rather than answered.

 

This is the real issue... I'm looking for a reason to invest and not finding one yet.

Anyone a member on Crowdcube? How bad are they at spamming if you sign up? Or is there no much more detail worth seeing. I'd like to see what it costs them to install and what revenue they get off the pods. Assuming this is as stated to expend the network by 1000 pods.

 

I'd ask what the dragons are always asking. .. how much have you been taking as salary and dividends. Do they have a set of published accounts or is it a private company at the mo, so just annual return to companies hous?

 

POD POINT HOLDING LIMITED - Filing history (free information from Companies House)
Not much in the way of directors salary. So not a bad start. Pod Point Holdings is the company the money goes through and which shows up the finances. Holding co has 20,000 shares in Pod Point Ltd.

Lots more turnover than I expected! Interesting looking at the accounts I was thinking why so little on the Tangible assets, but reading the crowd funding link they lease out their assets to customers. Still I thought that would make them tangible... unless they are doing something like the Pod Point manufacturing subsidiary actually still owns the assets?

27 million valuation on 4.5million turn over/1.5million Gross profit, 211k net profit.

How many additional pod points and how much income stream will the additional revenue generate?

You decide... (in best Geordie big brother voice).

 

So when I looked at their prospectus when they sought investment the last time around

Pod Point I seem to recall their having claimed to have shifted 17,000 chargers. I wasn't able to see anything like that number as being available on their site.

This would imply that they have sold a large number of chargers as private installations (which do not show on the public map) and have also sold a fair number abroad. This is possible.

When I then looked a bit deeper I found that there were two Pod-Point companies, one a manufacturing company and the other was the retail company and concluded that the manufacturing company might have built a large number of chargers and sold them to the next company which might have had them in a warehouse somewhere, waiting to be shifted to end customers.

Of course now that the Seedrs page is closed you cannot see how the offers were spread but I think that there was one investor who put in £1m and then the rest was made up of small investments.

 

The 17k figure includes private OLEV and public installs.

 

17k figure includes private OLEV and public installs

Yes, I know. The figure of 17,000 still sounds high for one provider to have installed.

In addition any already installed OLEV chargers do not represent an ongoing or future revenue stream since this was an item sold. These former sales are no guarantee of future sales and do not represent any value to the business.

This then leaves chargers which are installed in public areas from which PodPoint does derive ongoing revenue - the assumption would be that in order to generate the biggest revenue possible that the majority of these chargers would be listed on their site. There are not that many.

So, while the revenues of the business were £4.5m if £3.5m of that was from the sale and installation of private chargers and the OLEV grants are dropping then the £27.5m valuation looks ever more optimistic

 

Indeed that was my reading too, especially given that most of the chargers that are listed when I finally managed to make the app work - are in fact free, although the app seems to random list free ones, sometimes they are there sometimes not.

 

Charge points are the loss leaders, the razor to get you to buy the razor blades.

The recurring revenue stream generation comes from the cloud based back-office services. Seems perfectly reasonable, it's the same model our start-up is following but in a different market.

 

@GreyDad I call buzz word bingo!

 

Come on, get with the programme

 

I do like the look of the company, they seem to understand public charge need... no RFID, starts charging before you sort the payment, unlocks the cable if not charging, and the unit doesn't look bad either. Once I get the financial a bit better, I might bung in a few quid from my Ltd company... better than sitting there getting 0% interest with Barclays.

What I couldn't work out from their site... say you have a venue, and want to install a charger and make it publicly available - can you get a share of the revenue. They talk about it but don't provide a means to get in touch if you are keen to do that. Seems a bit of a serious flaw in the website if that's the case.

 

I do like the look of the company, they seem to understand public charge need... no RFID, starts charging before you sort the payment, unlocks the cable if not charging, and the unit doesn't look bad either. Once I get the financial a bit better, I might bung in a few quid from my Ltd company... better than sitting there getting 0% interest with Barclays.

You're better off doing it as an individual as the shares are expected to be EIS approved (30% of the cost can be claimed against your income tax if I understand correctly). Strictly for sophisticated investors and high net worth individuals.

 

They seem to be one of the better ones out there... they were the first to ditch RFID cards and that suggests they are listening.

Not for me though

 

I'd like to support them but the valuation seems pretty racy to me given the current revenue and profit levels.

 

My biggest problem is predicting income and whether it's feasible. More interested in the bonds/network roll out as that's what I'd like my money to support. However with a *** packet spreadsheet I'm not convinced there's enough cars on the roads till about 2018, and by then they'll all have 150 mile batteries so won't want to pay for away from home charging. Which puts investing in public charging.... Rock >> here << hard place.

The only hope is that car manufacturers release lots of short range PHEVs. Which judging by Outlanders success and BMWs commitment to have a PHEV in every model class by 2020 is about where we are heading. Sad. I'm not really hoping that we keep making PHEVs, when as my i3 has proved 80mile range (+ a bit of REX every few weeks) is enough to keep you doing 25,000 miles a year hassle free.

 

My biggest problem is predicting income and whether it's feasible. More interested in the bonds/network roll out as that's what I'd like my money to support. However with a *** packet spreadsheet I'm not convinced there's enough cars on the roads till about 2018, and by then they'll all have 150 mile batteries so won't want to pay for away from home charging. Which puts investing in public charging.... Rock >> here << hard place.

Interestingly the equity is mostly to pay for sales and marketing. That is all about the network roll-out.

 

Here's my *** packet numbers... with a bit of fun the potential growth for EV sales. Sales growth is currently over 150% IIRC but is that sustainable? Depends on how fast battery capacity can come on line.

Was trying to get an idea of potential usage which is the big unknown that drives energy sales, and what price can be charged. I do think there will be a race to the bottom in about 2018 as bigger battery cars make an appearance at "affordable" prices. Ie the low price will be whoever can get the margin lowest and still make a profit. Or free to users of other services.

 

Here's my *** packet numbers... with a bit of fun the potential growth for EV sales. Sales growth is currently over 150% IIRC but is that sustainable? Depends on how fast battery capacity can come on line.
View attachment 7907

Your numbers are very optimistic. For reference this new piece from GS suggests that by 2025 25% new cars will be EV but only 5% BEV: Goldman Sachs | Cars 2025

 

The other issue in this.. how do you get people to get off the charger so you can sell some more electric? Most EVs will be full after 3 hours and sat there idling (aka hogging). But if you want to kick them off, then who will want to use your service as they have to come back out in the rain to move a car. Especially if someone else is offering it as parking + kWh fee - park once and stay all day.

 

I have serious doubts that this is a significant revenue stream. I'd imagine that they'd make more money trying to flog them another charger.

 

That's the point. Even with optimistic growth I can't see a big enough market before most people do most trips charged at home and rapids in between. Workplace maybe a good one. Till everything is large BEV. All these PHEVs are going to need a top up to get home.

 

This is the bit I found interesting in their crowd funding email.

"We’ve already shipped over 20,000 charge points and supplied over 10 million miles of electric motoring. However, this is just a fraction of what we need to get the UK fully wired up for mass adoption of electric vehicles."

This suggests only 500 miles per charger!!! As this includes all their home installs and free to use posts in the wild we really are in the very early stages of all this.

 

There is such a sense of numbers plucked from the air.

I would so love to see them pitch to Deborah Meaden, Duncan Ballantyne or Peter Jones.

 

I got an email from POD Point at the weekend, regarding their capital raising. There are two options:

1. 3 year 8% bond (yield sounds a bit low to me, could do better on Funding Circle with a lower risk profile in my opinion) POD Point - Open Charge Bond raising £250,000 investment on Crowdcube. Capital At Risk. ; or
2. £1,500,000 equity offering (for 5.45%) which values the company at £27.5 million Q&A Forum POD Point - Electric Equity - Crowdcube | Crowdfunding business finance from angel investors and 'Armchair Dragons' - Crowdcube | Crowdfunding business finance from angel investors and 'Armchair Dragons'.

What do we think?

POD Point has carried the weight of early entry into EV charging infrastructure and has evolved as the market opportunity has shifted around. However the 'opportunity' is still not obvious as the rapid growth in the EV sector is now fuelled by plug-in hybrids, not pure battery electric vehicles (Mitsubishi Outlander PHEV the case in point). Plug-in hybrid vehicles rely far less on public charging infra-structure, on which I believe POD Point's revenue model relies.

 

Plug-in hybrid vehicles rely far less on public charging infra-structure, on which I believe POD Point's revenue model relies.

I take your point but the plug-in hybrids will always have a lower EV range so are attractive to the "top-up" model that POD Point favours (cf. the Ecotricity rapid model, which I agree will have trouble extracting money from PHEV users).

 

The reality of Outlander PHEV is that you don't use public infrastructure. After its 32 mile battery range is driven, you carry on using a combination of petrol power, and replenished electrons. When you get to your destination, you plug-in.

Admitted the Outlander has a long EV range but others marques are following now.

 

The reality of Outlander PHEV is that you don't use public infrastructure. After its 32 mile battery range is driven, you carry on using a combination of petrol power, and replenished electrons. When you get to your destination, you plug-in.

This is the whole POD Point model. Plug in wherever you park for more than an hour.