Wealth Club has led a £4.5 million investment round raising £2.35 million, or 52% of the total raise, under the Enterprise Investment Scheme (EIS) for Fabacus, a Software as a service (SaaS) platform for the licensing industry.
Wealth Club’s original allocation of £500,000 was quickly filled in just five days, and the additional £1.85 million raised was due to unprecedented client demand to invest.
Licensing operational processes remain largely siloed, inhibiting product identification and tracking. This leads to royalty reconciliation challenges, amounting up to c.20% of royalties going unpaid, and hindered brand protection efforts, as counterfeiters can go undetected.
To address this, and a number of other industry challenges, Fabacus was started by successful serial entrepreneur Andrew Xeni (who invested £3 million of his own money to date), who has a significant background in retail, including deep supply chain experience. The company is backed by other high-profile investors, including Tom Singh OBE (founder of 440-store chain New Look), Seneca Partners, Inovia (led by Patrick Pichette, former CFO of Google) and Mitch Foreman (former CFO of Disney EMEA Consumer Products), as well as Wealth Club. Andrew Xeni is also the founder of award-winning eco-conscious fashion brand, Nobody’s Child, of which Marks and Spencer is a strategic minority investor and shareholder, as well as founder of tech business, Soreto, servicing global clients such as H&M brands, Nike, Under Armour, Samsung, Puma and many others.
Fabacus’ platform, Xelacore, bridges the flow of licensed product sales reporting information and the data flow between licensor, licensee and end-user. This unlocks new capabilities assisting with consumer engagement initiatives, as well as provides robust data capture and structuring to meet increasingly stringent ESG reporting requirements. Its blue-chip customers include Epic Games, Ultimate Fighting Championship (UFC), Skydance Animation, Ubisoft and Activision Blizzard. Fabacus also has strategic partnerships with IMG Licensing, the world’s largest licensing agency, which manages the likes of Fiat Chrysler, Pepsi, Haribo, Volkswagen and Budweiser, Fanatics, who are leading the sports sector with clients including NBA, NFL and UEFA, and Wildbrain CPLG, agents of Peanuts and Teletubbies.
Fabacus has reached an exciting phase, having spent the last three years aligning the licensing industry on better practice and smarter collaboration, with an architecture built to enable all stakeholders to benefit from economies of scale. With significant growth and revenues expected in the next 12 months, the capital from this latest round will bolster the balance sheet and team, allowing the Company to accelerate faster.
Alex Davies, CEO and Founder of Wealth Club said: “Our clients were quick to act when we launched this deal and it was oversubscribed in just five days. Global licensors have already demonstrated strong demand for Fabacus’ market ready product, driven by the increasing scrutiny placed on governance standards within the industry, coupled with licensors’ strong desire to better engage audience and drive revenues. The Company is expecting significant recurring revenues this year and if delivered this company will be a very valuable asset. Given the potential size of the market opportunity and the dedication and commitment of Andrew and his team we believe Fabacus has the potential to deliver attractive returns to our clients.”
Andrew Xeni, CEO and Founder of Fabacus said: “Thank you to Wealth Club and all the investors who participated, we are now set and secure for this exciting next phase. The team at Wealth Club have been amazing, consistently demonstrating incredible professionalism and efficiency throughout the entire process. They successfully raised over £2.35m for us in under 8 weeks following a seamless and thorough due diligence process, delivered through two tranches, after the overperformance of the initial raise where they smashed the targets. Equally impressive was their swift understanding of the complex nature of our business and the intricacies of how our solution solves the deeply embedded challenges of the £300Bn+ licensing industry. We would highly recommend WealthClub to any business seeking capital, as well as to any individual seeking investment opportunities that are procured and presented through a trusted process and platform”.
About the Enterprise Investment Scheme
The tax advantages of EIS include:
1. Up to 30% income tax relief with option to carry back to the previous tax year.
2. Tax-free growth – no capital gains tax to pay on any gains.
3. Defer capital gains made elsewhere.
4. Loss relief – offset losses against income or capital gains tax.
5. IHT relief after two years.
About Wealth Club
The aim of Wealth Club is simple. To provide high net worth individuals and sophisticated investors with clear, impartial and well researched information on investment opportunities not typically available through mainstream stockbrokers or financial advisers. Wealth Club was set up in February 2016 and is now the largest non-advisory broker of tax efficient investments such as VCTs, EIS and Inheritance Tax Portfolios. Since launch 10,000 clients have invested more than £1 billion through its platform.