Introducing Hive.HR's latest EIS-eligible investment opportunity
We are delighted to introduce you to Hive.HR, the latest investment opportunity on the GrowthFunders platform that's eligible for the generous Enterprise Investment Scheme (EIS) tax reliefs and incentives.
Having raised £300,000 through GrowthFunders in their 2016 Seed Round, Hive are now raising £300,000 in their Super Seed Round to scale the business and prepare for their next phase of growth.
Who are Hive and what do they do?
Hive is an early stage Software as a Service (SaaS) business that helps organisations to improve employee engagement levels, communication and recognition in their workforce on an ongoing basis through a mix of industry leading technology and tailored paid support in the form of coaching, training and facilitation.
Hive offers an 'always-on' approach to employee engagement, enabling organisations to gather insightful employee feedback throughout the year in manageable chunks, without having to rely on the traditional 'annual survey'. Hive automates surveying initiatives and presents data to projects teams and management in a real-time and accessible way using an intuitive reporting dashboard. It's all about less admin, but more impact.
Led by a strong and experienced team, including Founder and CEO John Ryder, John’s background is rooted in product and service innovation. Having graduated University with a BA Honours Degree in Market Research, Product Development and Marketing, John then spent 13 years at Silverbean, a 50 person digital marketing agency. As a founding member of the Senior Leadership Team, John was responsible for leading new service development and sales to establish the agency as a major player in affiliate marketing and search engine optimisation.
What have Hive achieved so far?
Since launching the platform in January 2016, Hive has achieved the following:
- Built a strong pipeline of leads
- Onboarded and retained over 80 new customers
- Proven product market fit
- Demonstrated high levels of customer retention
- Won several contracts against other indirect solutions, including Glasgow Clyde College (versus People Insight and Qualtrics) and AVEVA (beat nine other indirect propositions)
- Secured a significant proportion of annualised deals including Unite Students, Companies House, Peabody, Thirteen Housing Group, Stockton Borough Council, Institute of Directors, Toyota Financial Services, AVEVA and Glasgow Clyde College
- Achieved a Net Promoter Score (NPS) of 8.8/10 for their latest, customer-wide survey in Q2 2017
- Generated billings of £176,000 in financial year May 16 to April 17
- Generated billings of £504,000 in financial year May 17 to April 18
The company's growth plans
Hive is seeking growth investment to capitalise on its unique position in the market and allow it to rapidly scale the number of service users while continuing to enhance its technology and service offering. Hive are now looking to build on their initial traction and raise a further £300,000 in exchange for a 13.04% equity stake in the company.
The additional capital will be used to accelerate the growth plan. The capital, based on a £300,000 minimum raise, will be used for the following:
- Make further sales hires: £70,000
- Invest into effective marketing channels: £160,000
- Make further investment into product development hires: £70,000
The company may overfund to a maximum of £750,000 and additional capital will be used to accelerate the growth plan.
Hive is uniquely positioned to become a global leader in employee engagement software solutions, having already won key customers, built up traction and grown their network of partners.
Why is there a need for Hive and their SaaS offering?
Workforce disengagement is a huge problem for organisations around the world. In Britain, it’s a problem that is seriously harming productivity.
Organisations today face a number of challenges in relation to this profile of engagement:
1. There is limited understanding and/or belief in the correlation between employee engagement and productivity/performance. Outdated models of command and control leadership continue to exist in many organisations and HR leaders face the challenge of educating managers on the value of employee engagement.
2. Many HR teams are using annual surveys to raise the profile of employee engagement in their organisations and to start to make progress around the key issues. However, annual surveys tend to be large and unwieldy, taking significant effort to distribute, ensure completion, analyse and feedback. Usually coordinated by HR or people teams, they are merely seen as a HR tool, not owned by managers in the business.
3. The final challenge is having gathered feedback, what do you do with it? Gallup have suggested that conducting surveys and either dealing badly with the feedback stage or not acting on the insights actually increases disengagement. Many organisations, despite being committed to increasing their levels of employee engagement, are ill equipped to understand how to address the issues raised.
Market size and traction
Because workforce engagement is relevant to businesses of all shapes and sizes, Hive’s customers vary in size and sector. As an example, current clients of Hive operate in the following sectors:
- Housing Association
- Professional services
- Further and Higher education
- Government office / civil service
- Local authority and contact centres
What investment has Hive had to date?
Hive was incubated by Visualsoft’s Innovation Lab from May 2015 to April 2016. This incubation period unlocked the ability for John, the CEO, and a developer to plan the business, build the software, release a minimum viable product, onboard customers and start to build a pipeline. A successful co-investment seed round via the GrowthFunders platform concluded in April 2016, with a raise of £300,000 achieved.
This raise, which was originally aiming to raise only £150,000, saw significant overfunding through co-investment from two professional investors and 38 suitably qualified retail investors.
This funding has been used to:
- Recruit and expand the team with several key hires
- Develop and deploy the key sales channel (the website)
- Develop the sales process and pipeline
- Gain significant traction with 80 customers and an NPS score of 8.8 / 10
- Acquire a deepened understanding of customer needs, challenges and requirements allowing further development of the product
Why should you consider an investment into this EIS opportunity?
Investing into EIS-eligible opportunities can be particularly advantageous for those investors focussed on tax efficient investment opportunities, as the tax reliefs and incentives are particularly generous.
But with each opportunity having its own merits, Hive's are clear:
Highly scalable - organisations from all sectors, shapes and sizes can benefit from a more engaged workforce, meaning the end scope of potential clients for Hive is constantly growing as more people are educated and become aware of the benefits and options available to them.
Growing market - employee engagement is a really pertinent topic at the moment and within that, the ‘always-on’ approach is red hot. In a 2015 CIPD HR Outlook Report, employee engagement was cited as the number one priority for HR functions in the UK.
Recurring income - as of May 2018, Hive has an ARR of £550k and the opportunity to increase average income per customer through the release of new product add-ons and increased options for paid support.
Experienced team - there is a strong and experienced leadership team consisting of Product and Service Development, Employee Engagement, Organisational Development and Technical Delivery.
Industrial confidence - Hive are already working with some well known names from a wide variety of industries, including: Tarmac, Peabody, BrewDog, Topshop / Topman, Companies House, AVEVA, Stockton Borough Council and many more.
Sales pipeline - there are numerous leads with total potential MRR of £248,000 / ARR of £2,976,000
Clear value proposition - the pilot schemes and clients to date have helped Hive to develop a clear value proposition for clients.
An EIS-eligible investment opportunity
This latest investment opportunity is EIS eligible, which means an investor can benefit from up to 30% tax relief, which can help mitigate potential downside risk and enhance potential investor returns.
With full details of the investment opportunity available in the investment documentation, you can view the full opportunity details - and invest in this EIS-eligible investment opportunity from as little as £100 - via the pitch page here.