You are on page 1of 50

INFORMATION MEMORANDUM

Proposed offer of 5,714,268 EIS compliant shares at 35p per share


to raise £2,000,000

February 2019
The content of this promotion has not been approved by an authorised person within the
meaning of the Financial Services and Markets Act 2000. Reliance on this promotion for the
purpose of engaging in any investment activity may expose an individual to a significant risk
of losing all of the property or other assets invested.

This information memorandum has been compiled by Tinizine Limited (a UK company registered under company number 09218957)
having its registered office at A1 Golf Driving Range, Rowley Lane, Arkley, EN5 3HW (the “Company”) and is being supplied in the United
Kingdom to a limited number of recipients in connection with a potential investment in the Company.
This information memorandum is exempt from Section 21 of the Financial Services and Markets Act 2000 pursuant to the exemptions set
out in the below cited Articles of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “FPO”). For these
exemptions to apply this information memorandum is communicated only to recipients who are one of the following: (i) persons who
have professional experience in matters relating to investments (being “investment professionals” within the meaning of Article 19 of the
FPO); or (ii) persons falling within Article 48(2) ("certified high net worth individuals") of the FPO who have signed a statement confirming
they fall within one of the requirements for being a certified high net worth individual as set out in Schedule 5 Part I of the FPO; or (iii)
persons falling within Article 49(2) (“high net worth companies, unincorporated associations etc.”) of the FPO; or (iv) persons falling within
Article 50 ("certified sophisticated investors") of the FPO who have signed a statement on the terms set out in Article 50(1)(b) of the FPO;
or (v) persons falling within Article 50A ("self-certified sophisticated investors") of the FPO who have signed a statement confirming they
fall within one of the requirements for being a self-certified sophisticated investor as set out in Schedule 5 Part II of the FPO; or (vi)
persons who are otherwise permitted by law to receive it (all such persons being “relevant persons”). This information memorandum
must not be acted on or relied on by persons who are not relevant persons.
Any individual who is in any doubt about the investment to which the communication relates should consult an authorised person
specialising in advising on investments of the kind in question.
This information memorandum may not be reproduced in any form, further distributed or passed on, directly or indirectly, to any other
person, or published, in whole or in part, for any purpose, in any jurisdiction where to do so would constitute a violation of the relevant
laws of such jurisdiction.
This information memorandum is provided for general information only and does not purport to contain all the information that may be
required to evaluate the Company and has not been independently verified. The information in this information memorandum is
provided as at the date of this information memorandum (unless stated otherwise) and is subject to updating, completion and revision.
No reliance may be placed for any purpose whatever on the information or opinions contained or expressed in this information
memorandum or on the accuracy, completeness or fairness of such information and opinions.
The information memorandum contains statements that are, or may be deemed forward-looking statements, which relate, inter alia, to
the Company’s proposed strategy, plans and objectives. Such forward looking statements involve known and unknown risks, uncertainties
and other important factors beyond the control of the Company (including but not limited to future market conditions, legislative and
regulatory changes, the actions of governmental regulators and changes in the political, social or economic framework in which the
Company operates) that could cause the actual performance or achievements on the Company to be materially different from such
forward-looking statements.
This information memorandum does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer
to purchase or subscribe for any securities. The making of this information memorandum does not constitute a recommendation by the
Company or any of its respective directors, officers, employees, agents or advisors in connection with any purchase of or subscription
for securities of the Company.
None of the Company, its respective directors, officers, employees, agents, affiliates or advisers, or any other party, undertakes or is
under any duty to update this information memorandum or to correct any inaccuracies in any such information which may become
apparent or to provide you with any additional information. None of the foregoing persons accepts any responsibility whatsoever for
the contents of this information memorandum or for any errors or omissions, and no representation or warranty, express or implied, is
made by any such person in relation to the contents of this information memorandum. To the fullest extent permissible by law, such
persons disclaim all and any responsibility or liability, whether arising in tort, contract or otherwise, which they might otherwise have in
respect of this information memorandum.
This information memorandum is not being distributed to persons outside the UK. However, any recipient of this information
memorandum in jurisdictions outside the UK should inform themselves about and observe any applicable legal requirements. This
information memorandum does not constitute an offer to sell or an invitation to purchase securities in the Company in any jurisdiction
other than in the UK.
Investment in unquoted securities of this nature, being an illiquid investment, is speculative, involving a degree of risk. It may not be
possible to sell or realise the securities until they are repaid by the Company. It may not be possible for a shareholder to obtain reliable
information about the risks to which the securities are exposed or the value of the securities at any particular moment in time.
By accepting receipt of this information memorandum, you agree to be bound by the above limitations and conditions and, in particular,
you represent, warrant and undertake to the Company that: (i) you are a relevant person; (ii) you will not forward this information
memorandum to any other person, or reproduce or publish this information memorandum in whole or in part, for any purpose and (iii)
you have read and agree to comply with the contents of this notice.
Date: February 2019

2
Contents
1. Investment Overview ........................................................................................................................................................................ 4

2. The Azoomee Offer............................................................................................................................................................................. 6


Economic Rights ..................................................................................................................................................... 6
Dividends ................................................................................................................................................................ 6
Return of Capital.................................................................................................................................................... 6
Voting Rights........................................................................................................................................................... 6

3. The Market Opportunity ................................................................................................................................................................. 7

4. A Fun Learning Platform for Kids 5+........................................................................................................................................ 8

5. Competitive Landscape .............................................................................................................................................................. 10

6. Senior Management Team & Non-Executive Directors ............................................................................................ 11

7. Business Model ................................................................................................................................................................................... 13


Signed commercial partnerships (B2B2C) .......................................................................................................... 14
Signed marketing partnerships ........................................................................................................................... 19
Business to consumer (B2C) ................................................................................................................................. 21

8. Azoomee Financial Projections ...............................................................................................................................................22

9. Fundraising & Use of Proceeds................................................................................................................................................ 26

10. Investment History........................................................................................................................................................................ 28


Equity .................................................................................................................................................................... 28
Current debt ......................................................................................................................................................... 30

11. Valuation............................................................................................................................................................................................... 30
Exit opportunity ..................................................................................................................................................... 31

12. How to invest ..................................................................................................................................................................................... 32

13. Appendices ........................................................................................................................................................................................ 33


Appendix 1 – Milestones ...................................................................................................................................... 33
Appendix 2 – Organisational structure .............................................................................................................. 47
Appendix 3 – Articles of Association .................................................................................................................. 48
Appendix 4 – Advance Assurance ...................................................................................................................... 48
Appendix 5 - Risks................................................................................................................................................ 48

3
1. Investment Overview

Azoomee is a multiple award-winning high-growth EdTech business, founded by two entrepreneurs


who successfully exited their last venture via a trade sale. In 2018, Azoomee was ranked one of the Top
30 companies to watch in the UK.

The digital native generation interacts almost daily with mobile devices and parents have exceedingly
high expectations about the media their kids consume. Add to this that 65% of kids born after 2010 will
grow up to work in industries that do not even exist today, and that 50% of all labour-intensive jobs
globally will be automated by 2030. This puts parents under increasing pressure to fill major learning
gaps: to teach their kids the 21st Century skills that schools do not have time to cover. An overwhelming
number of parents (95%), whilst accepting that new generation learning has to embrace technology, are
also concerned about their children accessing inappropriate content. Screen time needs to be safe, fun,
positive and educational!
At Azoomee, we have a deep understanding of parents’ consumption and preferences when it comes to
screen time for their kids. We have designed a multimedia platform for kids 5+, which provides unlimited
access to fun and educational games, videos and learning activities in one place. Azoomee is on a
mission to build the world's largest library of games, videos and educational activities around topics like
creativity, pro-social skills, STEM and the environment. Launched initially in the UK, today Azoomee is
available through multiple high-profile commercial partnerships with blue chip companies including
O2, Vodafone, easyJet, Clear Channel and the NSPCC and in all the major app stores in over 110
countries.

4
Please see Appendix 1 for key company milestones
Azoomee is now seeking to raise £2 million of growth capital to accelerate annual revenues from £900k
to £18 million in the next three years, transforming the company into a global EdTech business. This
strategic investment will allow the business to:
(i) license and develop a market-leading content library (games, videos and activities)
across multiple languages allowing Azoomee to fully leverage our international
distribution partnerships;
(ii) bolster the team from 16 to 25 full time staff by March 2020 to support and deliver our
projected growth in the next three years; and
(iii) increase marketing expenditure to drive greater product awareness, build Azoomee’s
brand and achieve significant revenue growth.
The senior management team, who have over 60 years’ combined experience in the media sector, firmly
believe that Azoomee has the long-term potential to be a global EdTech brand. In a relatively short
time, the business has developed and successfully launched a unique fun learning platform for children
that is consistently featured by the app stores and loved by parents (4.3/5 user rating – higher than
Netflix). Multiple leading global companies have signed commercial partnerships with Azoomee and
the business has a forward pipeline valued at 9x current annual revenues.
Alongside a significant global market need for Azoomee’s services, from an exit perspective, there is
already a growing array of potential trade buyers ranging from traditional education businesses to
global media companies. With this investment, Azoomee is poised to seize this opportunity and put all
shareholders in a very strong position to benefit from a highly attractive exit in the future.

“What a genius genius app and so well delivered. I’ve spent the
last 2 years struggling with the guilt of allowing my two boys to
watch “YouTube” etc etc. … This app provides a solution to all of
that... it is so well designed and I can’t speak more highly of it,
well worth every penny.”

Apple App Store – Customer review (Dec 2018)

5
2. The Azoomee Offer
Tinizine Limited (trading as “Azoomee”) is seeking to raise £2,000,000 of new equity capital via the
issue of EIS compliant Ordinary Shares.
The summary of the rights attached to the ordinary shares is listed below:
The material provisions of the articles of association of Tinizine Limited ("the Company") in respect of
the rights attached to the Ordinary Shares are set out below. This is a description of significant rights
related to the Ordinary Shares and does not purport to be complete or exhaustive. The Ordinary Shares
are ordinary shares of £0.001 each and have attached to them voting and specified distribution and
other capital distribution rights as follows:

Economic Rights
The Company's share capital is divided into ordinary shares of £0.001 each ("Ordinary Shares") and B
Investment Shares of £0.001 each ("B Investment Shares"). Save as specified below with respect to Voting
Rights, the Ordinary Shares and B Investment Shares shall rank pari passu in all respects.

Dividends
The Ordinary Shares and B Investment Shares shall rank pari passu in respect of the payment of
dividends. All dividends shall be declared and paid by reference to each shareholder's holding of shares
on the date of the resolution or decision to declare or pay such dividend. No dividend shall be payable
in respect of any shares unless and until the amount of such dividend when aggregated with all
dividends then payable to the holder of such shares exceeds the sum of £50 and all the dividends
declared but not paid shall be held by the Company as dedicated retained dividends on trust for such
holder of shares and shall be payable to such persons either upon the winding up of the Company or
when the cumulative value of such withheld dividends exceeds £50.

Return of Capital
On a winding up of the Company, the Ordinary Shares and B Investment Shares shall rank pari passu
in respect of a return of capital. If the Company is wound up, the liquidator may, with the sanction of an
extraordinary resolution of the Company and any other sanction required by the Companies Act 2006,
divide among the members in specie the whole or any part of the assets of the Company and may value
any assets and determine how the division shall be carried out as between the members. No member
shall be compelled to accept any assets upon which there is a liability.

Voting Rights
The Ordinary Shares shall each carry one vote. The holders of Ordinary Shares shall have the right to
receive notices of any general meetings and to attend, speak and vote at such general meetings. The B
Investment Shares shall, subject to any variation or abrogation of their rights, have no voting rights
attached to them, and holders of B Investment Shares shall not, subject to any variation or abrogation
of their rights, have the right to receive notices of any general meetings, or the right to attend at such
general meetings. Each ordinary share shareholder who is present in person or present by a duly
authorised representative, not being himself a member entitled to vote, shall have one vote and on a
poll every member shall have one vote for every share of which he is the holder. On a poll, votes may
be given either in person or by proxy.

6
3. The Market Opportunity
Today’s children spend billions of hours on connected devices. In the US alone, the Lancet recently found
that kids spend more than 3.5 hours on screens every single day. As a result, research shows that two
thirds of parents are looking for meaningful, high-quality content for their children. (Source: NPD Group)
This provides a substantial and as yet largely
untapped opportunity for Azoomee. Indeed, with
half the world’s population now online and
“I have a 6 year old and he loves this! … I get
devices in the hands of an ever-increasing
number of children, Azoomee is in a unique peace of mind because I know they always
position to provide the kind of curated experience add educational videos and games which
that combines media and learning that modern encourage him to think as well as have fun.
parents are desperately seeking. Also this week they’ve added extra stuff
In parallel, millennial parents realise they need to because it’s half term!”
plug an educational gap that schools are not
equipped to manage; 65% of today’s primary Apple App Store – Customer review (Oct 2017)
school children will have a job that has not been
invented yet but less than 3% of the education
market is currently digitized.
These parents – and their children – are digital natives. They are willing (and even keen!) to spend money
on a fun, high-quality and educational product that prepares their children for the future by teaching
essential 21st Century skills. That’s why we are leveraging this opportunity by building the world's largest
library of games, videos and educational activities around topics like creativity, pro-social skills, STEM
and the environment.

7
4. A Fun Learning Platform for Kids 5+
Available on any mobile device, a subscription to the award-winning
Azoomee app gives families unlimited access to premium multimedia
content in one place:

• Games & educational activities


• TV shows, videos & films
• New releases every week
• Safe instant messaging
• Personalised profiles, playlists, favourites,
content curated by age

Positive screen time


Our mission is to make screen time meaningful for every child in the world. That is why Azoomee is
building the world's largest library of games, videos and educational activities based on 21st Century
skills like online safety, the world around us, problem solving, technology and creativity.

Proven benefits for modern families


• Positive screen time: Content selected by experts in a highly engaging, playful app
• Educational: Covering topics outside of the school curriculum
• Value for money: Unlimited family access in a simple monthly subscription
• All you can eat content: And updated constantly to reflect new learning requirements
• Ad-free & committed to privacy: GDPR and COPPA compliant
• Available in 9 languages: English, French, German, Spanish, Afrikaans, Portuguese, Italian,
Greek, Turkish

Loved by children and parents around the world

“The app is brilliant and I'm more than


happy to pay £4.99 a month for all the features
knowing my daughter will be safe on it.”
Apple App Store – Customer review (Mar 2017)

8
Videos
Azoomee has more than 400 hours of video content available to stream today. With the help of this
investment, we expect this library to grow to more than 1000 hours by 2020.

Games and activities


There are more than 150 premium games and activities available for instant access. To ensure ongoing
engagement, we expect this library to grow to 300 by 2020.

9
5. Competitive Landscape
Azoomee operates in a large but under-served segment of the EdTech market, the nexus of media and
learning. Millennials already make up the biggest cohort of parents in most countries and are spending
exponentially more on all things related to learning. Their digital consumption is significantly higher per
capita than all other generations, yet they are currently underserved in their access to engaging learning
content.
Here’s how Azoomee meets the demands of these parents:
1. Mobile-first: optimised for and available on mobile devices
2. Multimedia: providing games, videos and learning activities
3. Prepares the kids for the world of tomorrow: 21st century skills are the future
4. Fun & educational: combining media with learning
Major media incumbents like Netflix, YouTube and BBC iPlayer focus almost exclusively on “fun”. The
traditional EdTech curriculum-based services don’t cover 21st century skills and are boring.

Azoomee’s competitive landscape is limited at present with a few players including:

Hopster, PlayKids and Marco Polo only target the under 5s segment (pre-school) and as such have
minimal crossover with Azoomee.

Azoomee’s competitors have attracted substantial investor interest in recent years:


o Epic! has secured a total of $21.5 million in investment from Reach Capital, Rakuten Ventures,
Menlo Ventures, TransLink Capital, WI Harper, Brighteye Ventures, and Innovation Endeavors.
The company offers a digital library of books alongside videos and quizzes.
o Hopster has raised an estimated £10.0 million over several rounds including Venture Founders,
Sandbox & Co and Sony Pictures Television Networks.
o Marco Polo Learning raised $13.5 million over several rounds including a $8.5 million investment
from Boat Rocker Ventures.
o Curious World, launched by published Houghton Mifflin Harcourt, was acquired by Sandbox &
Co for an undisclosed sum in 2018.
o Yogome raised $36.5 million in total from investors including Exceed Capital Partners and Insight
Venture Partners
o PlayKids is backed by the Brazilian telco Movile which has invested $15 million in the company.
Source: Crunchbase

10
6. Senior Management Team & Non-Executive Directors
Azoomee’s senior management team have been working together successfully for over three years;
together they combine over 60 years’ experience in children’s media and technology.
Azoomee operates a four-pillar company structure with commercial operations managed by the CEO,
Douglas Lloyd, all educational, content & creative decisions made by Estelle Lloyd, product overseen by
Mahesh Ramachandra and all technical development carried out in-house under the supervision of
Klaas Ardinois. Outside the management team, Azoomee has invested in developing a committed and
talented team of experts in technology, education, content, marketing and design.

Relative to the market opportunity and the availability of Azoomee’s service in app stores in 110 countries,
the team is small. One of the key purposes of the fundraising is to add new members to the team to
develop more clearly defined roles for individuals and to reduce reliance on the co-founders specifically,
to go after large global business development opportunities.

Douglas Lloyd, Co-founder and CEO


Douglas Lloyd is the co-founder and CEO of Azoomee. He began his career in finance, working for
HSBC, Close Brothers and WR Hambrecht over a ten-year period in London, Paris and New York.
Douglas has particular expertise in venture capital and M&A within the tech sector. In 2005, Douglas
co-founded the digital media business VB/Research with his wife Estelle. Together they built and grew
the company, raised external funding, and successfully sold the business to a FTSE250 media company.
Douglas and Estelle co-founded Azoomee in 2014. Douglas is an experienced CEO and heads up
commercial operations, including B2B2C partnerships. Since its inception, his ability to secure
transformative partnerships with major international corporations, including Amazon, O2, Vodafone
and easyJet, has been instrumental to the business. This has allowed Azoomee to build a strong presence
in the UK rapidly, and lay the foundations for global expansion. Douglas has recently been nominated
Technology Personality of the Year in the UK.

Estelle Lloyd, Co-founder and COO


Estelle Lloyd is co-founder and COO of Azoomee. She is responsible for, content commissioning,
production and curation, as well as creative and educational curriculum. She is also executive producer
of our BAFTA-nominated internet safety series Search It Up.
Before Azoomee, Estelle spent much of her career in media & technology starting in New York working
in the tech & media investment banking industry for 10 years. In 2006, Estelle founded her first start up

11
in digital publishing, sold to FTSE 250 Centaur Media plc in 2011. As one of the UK’s leading female
technology entrepreneurs, Estelle is an experienced public speaker and press interviewer on the subjects
of financing entrepreneurial businesses, building and scaling a tech business and mobile & technology
trends. A strong supporter of women-led businesses, she is also an investor and non-executive board
director to several start-ups. Estelle won Innovator of the Year (2017) at the Women in IT Awards.

Klaas Ardinois, Chief Technology Officer


Klaas Ardinois is the Chief Technological Officer at Azoomee. A computer scientist with more than 10
years' worth of experience in the ICT sector, Klaas’ expertise is delivering software projects for large
organisations. Prior to Azoomee, he was the Engineering Delivery Manager for News International
where he managed the technology teams for all the Sun Digital products (web, mobile, tablet). Klaas
holds a Masters of Business Administration (MBA) from Cardiff Metropolitan University and a Bachelor
of Science Degree in Computer Science from Katholieke Hogee School. During the last two years Klaas
has been nominated as CTO of the year in the UK for his work at Azoomee alongside global brands
including JLL, Ocado News UK, Euromonitor, TATA and BT.

Mahesh Ramachandra, Chief Product Officer


Mahesh Ramachandra is Chief Product Officer at Azoomee. He has 20+ years of experience creating
multi-platform games, interactive TV, entertainment and educational products for global businesses.
Prior to joining Azoomee, Mahesh was Head of Product at chart-topping pre-school app Hopster.
Other experience includes: Global Director of Entertainment for Galleon Holdings Plc, where he created
multi-platform entertainment products for the Chinese market; and senior product development posts
in Singapore covering interactive TV, e-learning and e-commerce. Mahesh holds a Masters in Design
for Interactive Media from Middlesex University and a BA (Hons) in English and American Literature from
the University of Kent at Canterbury.

David McDonald, Non-Executive Director


David McDonald joined Azoomee as a Non-Executive Director in June 2018 bringing more than 25 years
of experience in media and technology companies to the business. Prior to joining Azoomee, he worked
inside major corporations including British Airways, Time Warner, and T-Mobile International, and held
directorships at digital media companies in the SaaS and digital media space. David co-founded
Saffron Digital, a leading digital video platform provider which he sold to HTC in 2011, delivering a 10x
return to his lead investors.
David has significant experience executing commercial digital licensing deals across multiple film
studios and music labels, as well as experience building sales relationships with tier 1 players such as
Sony Ericsson, HTC, KDDI, Nokia, DT and Sky Broadcasting.

Pascal Podvin, Non-Executive Director


An international executive and serial entrepreneur, Podvin has successfully established, and driven
hyper-growth technology businesses up to $1bn valuation, secured VC funding, and worked with some
of the most talented teams in Silicon Valley, with the ultimate objective to prepare for an optimal exit.
He has consistently and successfully delivered on that value proposition in 6 of the 8 businesses he has
been associated with. Podvin shares his time between the Bay Area, and various European capitals.

12
7. Business Model

To date Azoomee has generated the majority of its revenues through commercial partnerships (see
below) with large blue-chip companies (O2, Vodafone, Amazon) who provide direct access to their large
existing customer base in the family segment. The two most common business models that are used with
these partners are:
i) revenue share (where a partner assumes all or the vast majority of the direct consumer
marketing expenditure); and
ii) pre-paid subscriptions (where a partner buys Azoomee subscriptions and then includes
them as part of a bundled offer).
Direct to consumer revenues (B2C) are driven by paid advertising on social media, PR and influencers,
and has not been a major focus to date. Now that the business is starting to generate more traction in
particular markets and brand awareness is growing, the intention is to increase spend in those markets
to accelerate B2C revenues.

“As a partner, Azoomee really stands out for its responsiveness, its strong
customer-focus and the reliability of its core product. The company and its
staff are well known within O2; Azoomee has become a great example
internally of how a partnership should work between a large and high
growth entrepreneurial company.”

Phil Ledward, Product & Category Management -Value Added Services

13
Signed commercial partnerships (B2B2C)
Since Azoomee was launched as a product in July 2016 via a commercial partnership with O2 in the UK,
the company has signed a series of B2B2C partnerships globally. The majority of these B2B2C
partnerships generate revenue for Azoomee whilst also growing visibility for the company’s brand and
its characters (the Oomees) within its target family audience. These commercial partnerships currently
account for the majority of Azoomee’s revenues.

Summary:
O2 (UK Partnership)

Azoomee was launched as a consumer product following signature of a partnership with O2 in July 2016.
Under the terms of the partnership, customers purchase tablets pre-loaded with Azoomee either via the
O2 website or in-store. Every tablet includes an Azoomee voucher providing customers with a 2-year
subscription to the service.

Positive customer feedback High-profile in-store marketing

4.1 customer rating


O2 live events and community outreach

14
Summary:
Tomorrow Street
Azoomee joined Tomorrow Street, a 50:50 JV between Vodafone Group and the Luxembourg
Government in May 2018. Since it was founded in 2017, over 2,000 companies have applied to join; only
6 companies including Azoomee have been accepted.
Tomorrow Street’s mission is to identify scale-up companies anywhere in the world with developed
products / services that can generate significant revenues for the entire Vodafone group (70 operating
companies and partners) and the scale-ups. Being part of Tomorrow Street is a huge achievement and
provides a significant high visibility platform for Azoomee to grow globally. Furthermore, the
involvement of the Luxembourg government means that Tomorrow Street can provide high level access
and introductions to other companies and telcos outside the Vodafone group.
Tomorrow Street’s role is to assist its companies in winning business through introductions, meetings
and tactical interventions. They are remunerated exclusively based on success, which is calculated solely
on revenues. Since joining Tomorrow Street, Azoomee has signed two deals with Vodafone operating
companies, been invited in the largest kids’ content tender process in the US (Sprint) and opened up
conversations with a further 15 companies within the Vodafone group.
Introductions from Tomorrow Street since May 2018

Summary:
Vodafone (Global)
Since the Tomorrow Street partnership was signed, Azoomee has launched commercially with two
Vodafone OpCos (South Africa and Malta – endorsement video available here) and began generating
revenue from Vodafone operating companies in Q4’2018. Azoomee is about to go live with Vodafone in
Albania and is in active discussion to launch in a further 12 markets. The management team forecast
that at least three additional Vodafone operating companies will be active by the end of the next
financial year building on successes in Malta and South Africa.
Case study: Vodafone Malta

15
Following 9 months of collaboration, Tomorrow Street and Azoomee have agreed the following strategy
with international Vodafone OpCos.
(i) Priority 1 markets are English-speaking OpCos where Azoomee’s current product offering
and English-language content library can be commercialised with no additional localisation.
Azoomee has already begun discussions with a number of OpCos in these locations with a
view to launch from the second half of 2019 onwards.
(ii) Priority 2 markets are markets where limited local language content is available and
customers expect largely English-language content on digital services. These are forecast to
launch from 2020 onwards.
(iii) Priority 3 markets require local language content to allow Azoomee to meaningfully enter
the market. Azoomee will expand its non-English language content library as part of this
fundraising to accelerate internationalisation in these markets from the second half of 2020.
Aligned with this focus, is also an understanding to capitalise on specific opportunities within the
Vodafone group as they arise even if an operating company is not a Priority 1 market geographically.
For example, there are detailed discussions ongoing with Vodafone in Greece and Portugal. Both
markets require localised content but deals are being pursued because of these two markets’ interest in
reinforcing their family proposition.

Key: Final contract negotiations Active partnership discussions

Priority 1 Priority 2 Priority 3


English-speaking markets Markets where English-language content Markets where local language
is acceptable (at least to start with) content is required

Australia Albania Austria


Canada Bahrain Belgium
Fiji Bulgaria Benin
Ghana Croatia Brazil
India Czech Republic Cameroon
Ireland Denmark Chile
Kenya Estonia Cyprus
Lesotho Faroe Islands DR Congo
New Zealand Finland Egypt
Tanzania Hungary Germany
UK Kuwait Greece
Latvia Iceland
Lithuania Iran
Macedonia Italy
Malaysia Japan
Netherlands Libya
Norway Mozambique
Qatar North Cyprus
Romania Portugal
Serbia Russia
Singapore Spain
Slovenia Switzerland
Sweden Taiwan
Thailand Tunisia
UAE Turkey
Ukraine
Vietnam

16
Summary: Azoomee TV (Amazon Channels, Amazon Fire TV, Cable TV)

Recognising the quality of Azoomee’s app on the Amazon mobile Appstore, the Amazon UK team invited
Azoomee to launch a kids’ video channel on their new Amazon Prime Video Channels service in
November 2017.
Under the terms of this partnership, Azoomee provides a fun learning video channel on Amazon
Channels based on a revenue share model. The success of Azoomee TV in the UK is now driving
significant interest from other international markets, particularly the US. In addition to discussions about
extending Azoomee TV into the US with Amazon, the business is also in detailed talks with multiple cable
operators in the US, including Comcast, AT&T and Dish, to launch Azoomee TV. This underpins the
projected growth in Azoomee TV during the next three years.
Our close relationship with Amazon, cemented by our
extensive use of their AWS hosting platform, has also
opened up other opportunities with Amazon. Most
significantly, we have been in discussions to create a
games-only service for their wildly popular Fire TV
device (in the US, UK and German markets over 35m
units have been sold). We have created an innovative
prototype that makes compelling use of Amazon
hardware, which Amazon have agreed to support
when it comes to market. It is management’s intention
to dedicate part of the fundraising to develop this
solution for launch before the end of this year.
Note: revenue from this Fire TV games service has not
been included in Azoomee’s financial projections.

17
Summary: Infomedia (Direct Carrier Billing)
There are three ways in which a mobile phone user can pay for a digital service or app:
• In-app payments (IAPs): this is managed by Apple, Google and Amazon on their respective
operating systems and devices, and is usually linked to the user’s credit card.
• Credit cards, PayPal or other methods linked to a bank account: the user pays for the service
directly to the supplier/publisher with their card or by providing bank details
• Direct Carrier Billing (DCB): the user pays for the service or app with their phone credit, or when
settling their phone bill. The user’s mobile carrier essentially handles the billing, often through
an intermediary or gateway.
Direct Carrier Billing (DCB) is the fastest-growing payment method across all geographic markets and
user demographics (DOCOMO Digital, 2018). It is particularly popular in developing markets where
traditional banking methods are not widespread. The ease of making a digital purchase, using an
existing relationship with the mobile carrier and the easily understood currency of phone credit, has
made this method of payment wildly popular. Given the growth of DCB, Azoomee has taken steps to
ensure that it is a core part of its platform capabilities.

Carrier partners include:

Infomedia is a well-established DCB gateway that is integrated with 50+ signed telecommunication
companies globally. Azoomee has concluded a comprehensive agreement with Infomedia with the
objective of rolling out Azoomee around with world with DCB payment capability from the end of Q1
2019. There are two immediate benefits to our relationship with Infomedia:
• Build once, bill everywhere: Azoomee needs to make only a single integration with Infomedia,
who are in turn already integrated with 50+ carriers, ready to take payment. Thus high ROI on
the initial development.
• Local marketing to drive success: Infomedia has strong relationships with local marketing
agencies in each of their operational markets. These agencies, selected by a rigorous tender
process conducted by Infomedia, will market Azoomee locally on a revenue share basis.
We believe that success with Infomedia will translate into not only into much higher B2C revenues, but
also accelerate new B2B2C opportunities with local carriers.

18
Signed marketing partnerships

Summary: Custos Group


Custos Group is an investment company and the owner of Metro Media House. Under our
partnership agreement (signed very recently) Metro Media House will collaborate to
accelerate adoption of Azoomee in markets where we are looking for more distribution.
Metro Media House will initially launch a campaign in Sweden, with a wider international
roll-out once testing and integration are complete. Discussions around Swedish marketing
channels (launching Q1 2019) include:

• Press and public relations activities in Sweden including regular thought-leadership pieces in the
Metro newspaper
• Digital marketing activities across multiple channels including social, display and programmatic
• Print advertising in Metro newspapers
• Influencer marketing campaigns (Instagram, YouTube etc.)
The partnership provides strong financial incentivize for Metro Media House to ensure that their
marketing campaigns are successful for both parties.

Summary: Clear Channel


Clear Channel is one of the UK’s leading out of home media owners and advertising solutions providers.
Their advertising inventory includes more than 40,000 billboards, digital screens, bus stops and retail
locations.
In January 2019, Azoomee finalised a long-term marketing partnership with Clear Channel. Focusing
initially on the UK market, Clear Channel will run outdoor advertisements for Azoomee in more than 900
UK locations, including shopping malls and supermarkets, with significant footfall among Azoomee’s
target family market. This partnership is structured to provide Clear Channel with significant incentives
to ensure successful campaign outcomes.
Clear Channel UK is part of Clear Channel International, which has operations across the globe,
including in the lucrative US market, providing significant scope to expand the partnership after
completion of this fundraising and based on success in the UK.

19
Summary: NSPCC
The NSPCC is the UK’s leading children’s charity and is a supporting
partner of Azoomee. Based on a shared belief that children should be safe
online, we have been working together since February 2015. As a part of
this partnership, Azoomee can use the NSPCC logo in its marketing –
instantly instilling trust and reinforcing our brand – and receives visibility
via the NSPCC and Childline websites, social media and beyond.
Since the beginning of our relationship, the NSPCC has also provided
safeguarding support and guidance for the application and acted as
supporting partner for our original internet safety series Search It Up,
which received a BAFTA nomination and is regularly one of the most
popular shows on Azoomee.

“… the NSPCC is delighted to be working so closely with


Azoomee because the product provides primary children
with a safe environment where they can watch, play, learn
and send parent-approved messages.”

Mark Wood, Chairman


NSPCC

Summary: Immfly (In-flight entertainment)


In December 2017, Azoomee signed a long-term marketing partnership
with in-flight entertainment company Immfly. Through this partnership,
Azoomee’s own-brand games, featuring our highly-recognisable
Oomee characters and IP, are available to play on flights operated by
easyJet, Iberia Express, Pegasus, Sun Express, Volotea, Wamos and XL
Airways.

This partnership provides high-profile brand visibility for Azoomee,


demonstrating the quality of our games and IP to an international
audience. This is a marketing/brand visibility partnership; Azoomee is
not forecasting this partnership to generate revenues.

High-visibility distribution on the following airlines:

20
Business to consumer (B2C)

Azoomee is unique in that its service comfortably embraces both B2B2C opportunities (i.e. partnering
with large corporates to supply Azoomee directly to their customers) as well as a Direct or Business to
Consumer offering – selling the app directly to customers through the popular app stores.
In the multi-billion-pound app industry, the kids or family category is one of the fastest-growing
segments. It is important to note that, for young children, tablets and smartphones are the primary way
they consume digital media content, whether it’s pure entertainment or education or the fun learning
mix that Azoomee specialises in. Moreover, children are getting their own tablets younger and at a
faster rate than any other device – more than half of kids in the UK have their own tablet by the age of
8 (Ofcom, 2018). The only way to get apps on these devices is through the official Apple, Google or
Amazon stores where both parents and children discover new apps. These stores offer unprecedented
access to a global and growing market for digital media.
Through these stores, Azoomee is available globally in over 110 countries. Customers can subscribe
directly to the Azoomee app through the included popular in-app purchasing method; monthly pricing
varies by country ranging from £5.45 to £2.25.
All sales & payment are automated and handled by the stores, with a 30% commission paid to Apple,
Google or Amazon (dropping to 15% for subscriptions longer than one year). Since launching in 2016,
Azoomee has consistently developed a strong app store presence
and a high-performing app that appeals directly to both children and
to parents. Azoomee’s efforts have been recognized by Apple - the
store with the highest revenues and standards – by selecting
Azoomee as ‘App of the Day’ on 11 May 2018, and subsequently
featuring it several times both in the UK and internationally. Azoomee
has also been featured by Amazon, and has been approved by
Google for its ‘Made for Families’ programme. All these editorial
features are key drivers of download traffic.

To date, Azoomee has been almost exclusively focused on partnerships. With product market fit now
established and new agreements in place with partners like Clear Channel, Custos and Infomedia,
Azoomee is actively exploiting the many new opportunities of the direct-to-consumer model. For
example, Direct Carrier Billing (DCB – see above) has opened up many new markets and customer
segments by offering users easier and more relevant payment methods. Azoomee will be implementing
DCB in Q1 2019. When combined with our increasingly localised product and optimisation for lower-end
budget devices, Azoomee will continue to be a consumer-friendly proposition for the developing world.

21
8. Azoomee Financial Projections

YE Mar 18 YE Mar 19 YE Mar 20 YE Mar 21 YE Mar 22


Actual Landing Forecast Forecast Forecast

1. O2 Family Tablet Bundle (UK only) £239,000 £392,000 £535,000 £669,000 £733,000

2. B2B2C (Other Telco Partners) £218,000 £1,530,000 £3,940,000 £8,921,000

3. B2B2C (hospitality and others) £142,000 £340,000 £486,000

4. Direct to Consumer (App stores) £33,000 £85,000 £274,000 £1,471,000 £3,173,000

5. Amazon Prime Channel £9,000 £52,000 £1,032,000 £3,432,000 £4,778,000


and other TV channels

6. Grant funding £48,000 £100,000 £100,000 £100,000

7. Deferred revenue £175,000 £175,000 £175,000 £175,000 £175,000

Gross contract revenue £504,000 £921,000 £3,788,000 £10,127,000 £18,367,000

Cost of sales £129,000 £350,000 £1,767,000 £4,767,000 £8,740,000

Gross profit £375,000 £571,000 £2,021,000 £5,360,000 £9,627,000

Operational expenses * £878,000 £784,000 £1,346,000 £2,168,000 £2,954,000

EBITDA (£678,000) (£213,000) £675,000 £3,192,000 £6,673,000

* Approximately 60% of operational expenses are capitalised on the balance sheet as assets to recognise the investment in the platform,
technologies, intellectual property and content.

Current trading
In the current financial year, the business is forecasting 80+% growth in revenues.
At the start of the year, growth was underpinned by the O2 partnership. Following an upgrade to the
family tablet bundle in December, which now has Azoomee pre-installed, we anticipate continued
growth (+33%) next financial year as more subscriptions get enabled. During the second half of the year
revenues have grown further as the business diversified from being reliant on a single telco partnership
contract in the UK to multiple international partnerships. By the end of this financial year, management
anticipate to be generating meaningful revenues with at least seven different revenue-generating
partners in five countries. As at 31 January 2019, the business has live or about to go-live revenue-
generating partnerships in the UK, Malta, South Africa, Albania and Sweden.

22
Analysis: Year ending March 2020
Revenue Analysis
1. O2 Family Tablet Bundle (UK only): Since O2 launched their updated family tablet in Q4 2018,
subscription rates have increased markedly and are likely to grow further now that their new
family device is pre-installed with Azoomee. As a result, Azoomee expects revenues to increase
36% in YE March 2020. As an existing long-term contract with agreed pricing, margins will
remain stable. Conservatively, we have assumed that no new propositions will be launched next
year.

2. B2B2C (Other Telco Partners): Azoomee is currently live in two Vodafone markets (South Africa
and Malta) and is in late stage commercial discussions to launch in its third Vodafone market
(Albania). Based on our large pipeline of other telco opportunities, including those leveraging
our Tomorrow Street relationship, Azoomee expects the total number of revenue-generating
telco partnerships to increase to seven by the end of YE March 2020. Over the longer term,
management forecasts assume that Azoomee converts no more than 2% of the total
addressable market of family customers in any geography; these projections are based on
targets discussed with existing partners.
We have assumed a flat 55% cost of sales associated with all revenue from this channel,
reflecting existing agreements with Vodafone in Malta and Vodacom in South Africa.
Discussions with multiple international telcos indicate a cost of sales through their channels
ranging from 40% to 55% depending on the business model that they use.

3. B2B2C (hospitality and others): Azoomee’s web portal for the hospitality industry is currently
being trialled by one major hotel chain and is being reviewed as part of a wider proposition by
certain other large international chains.

4. Direct to Consumer (App stores): Revenue from Azoomee’s direct to consumer business via the
app stores is forecast to grow significantly in YE March 2020. This growth is driven by:
(i) increased organic installs as a result of ongoing international app store features, and a
4x increase in spending on branding in YE March 2020. This includes the cost of
performance-based marketing partnerships with outdoor advertising giant Clear
Channel in the UK and Custos Group/Metro Media House in Sweden;
(ii) a substantial increase in user acquisition spending combined with better cost of
acquisition metrics achieved through the optimisation of existing campaigns, new
product features and recruiting a specialised digital marketing team; and
(iii) additional marketing partnerships replicating those already signed with Metro Media
House and Clear Channel. Azoomee signed both partnerships within a month of an initial
meeting and expects to sign additional agreements within the next 12 months and
beyond rapidly.

5. Amazon Prime Channel and other TV Channels: Azoomee expects revenue from our Amazon
Channel to continue to grow due to ongoing marketing investment from Amazon. Alongside this,
and based on active discussions with a number of cable operators in the US, we expect to launch
Azoomee TV with three additional partners by the end of March 2020. This will focus on North
America where we are seeing significant demand for our service due to a shortage of kids-
based content in our target age group, resulting in substantial revenue growth in YE March
2020.

23
6. Grant Funding: Management has already secured funding through the H2020 program.
Through its new subsidiary in Luxembourg, management expects to secure £175k of grant
funding in YE March 2020 based on existing applications/discussions with a number of funding
bodies including Lux Innovation and Creative Europe.

7. Deferred Revenue: This relates to subscription revenue that has been generated with partners
in one financial year but cannot be accounted for until the following financial year. (This is a
standard feature of subscription-based businesses like Azoomee).

FY 2020 business pipeline


Azoomee’s commercial business development team, under the leadership of CEO Douglas Lloyd, has
already identified and qualified a significant partnership pipeline valued in excess of £9.6 million for the
coming financial year ending March 2020 (weighted value £3.4 million).
One of the principal use of proceeds from this £2 million fundraising is to expand the marketing team
significantly (4 new hires) to accelerate negotiations of existing and new partnership deals.
Looking at the current pipeline in more detail, Azoomee’s pipeline covers over 40+ live discussions with
major carriers, media companies, hospitality businesses and content partners across Europe, North
America and Africa including:

Weighted business development pipeline

Cost of sales
This principally includes commission payments due to the app stores, business development consultants,
Tomorrow Street and revenue share with partners. This is a variable cost that grows with sales, which
is also why gross margin is a very important financial metric for the business. Depending on the revenue
mix between the various revenue streams and as the business becomes less reliant on third party
business development consultants who often charge introduction fees, management believe the gross
margin could be higher than currently projected.

24
Operational Expenses

YE Mar 18 YE Mar 19 YE Mar 20 YE Mar 21 YE Mar 22


Actual Landing Forecast Forecast Forecast

Content £426,000 £356,000 £850,000 £1,380,000 £2,100,000

Staff £1,193,000 £1,131,000 £1,434,000 £1,936,000 £2,486,000

Marketing £188,000 £89,000 £570,000 £1,250,000 £1,700,000

IT operations £134,000 £140,000 £180,000 £250,000 £420,000

Other £254,000 £244,000 £330,000 £605,000 £680,000

TOTAL OPERATIONAL EXPENSES £2,195,000 £1,960,000 £3,364,000 £5,421,000 £7,386,000

Note: Approximately 60% of operational expenses are capitalised on the balance sheet as assets to recognise the investment in the
platform, technologies, intellectual property and content.

Content costs: Azoomee has budgeted to increase investment in content significantly to £850k in YE
March 2020. This increase will allow Azoomee to:
(i) Expand our English language content library to provide a continually engaging 21st century
learning curriculum that is refreshed even more regularly; and
(ii) license and develop multi-lingual games and video content in several core languages to
leverage the international opportunity.
The content team have developed a very sophisticated content licensing strategy based exclusively on
fixed price contracts. It is worth noting that in the current financial year content costs are 17% less than
the prior year despite revenues growing by c.80%. Operational leverage on content licensing and
investment will become even more beneficial as the business grows further.

Staff costs: Azoomee expects to increase staffing costs to £1.4m in YE March 2020. This investment is
necessary to leverage the global market opportunity and enable the business to grow rapidly resulting
in the average number full-time staff increasing from 16 to 25 during the next 12 months. The new team
members will increase resources dedicated to business development, marketing, content and finance.
For more information on staffing see Appendix 2.

Marketing: Azoomee has budgeted to increase marketing spend significantly in YE March 2020. This
increased investment will be allocated to branding, press and PR, offline activations and user acquisition
marketing to leverage the direct to consumer opportunity. This supports recent partnership wins with
Clear Channel, Infomedia and the Custos Group.

IT operations: As a digital product, Azoomee incurs IT operation costs including hosting and streaming
video content, games and activities. Azoomee has developed a highly efficient and scalable platform
where the user base can grow 12x and only incur a 2x increase in costs. As such the management team
is confident IT operations costs will grow modestly to £180k in YE March 2020.

Other: This includes rent, rates and utilities, professional fees and other expenses. Azoomee operates
an office in central London with space to accommodate additional staff. As such, Azoomee expects costs
to grow modestly in line with inflation and rates rises. The management team has budgeted the cost of
legal and professional fees to increase in YE March 2020 to cover the costs associated with signing
multiple new international partnerships. Additionally, Azoomee expects sundry costs to increase
modestly in YE March 2020 in line with the growth of the business as a whole given the growing
headcount.

25
9. Fundraising & Use of Proceeds
Azoomee has achieved product-market fit in the UK; the product has an outstanding user rating of 4.3
stars (higher than Netflix) on the UK App Store and has received multiple features from Apple and
Amazon, including the prestigious App of the Day position in the UK. In H2 2018 Azoomee launched
commercially with Vodafone Malta, Vodacom (South Africa) went live in January, in Sweden we launch
with the Custos Group in early February and Infomedia will be live in early March.
The significant business pipeline (£9.6 million) combined with the imminent launch of four new
partnerships in Q1 2019 (Vodacom, Custos Group, Clear Channel, Infomedia) underlines the very exciting
high growth stage of the business and the substantial global market opportunity that is available.
The purpose of this fundraising is to seize this growth opportunity, establish Azoomee as a true global
EdTech business initially in English speaking markets and build a sustainable, profitable subscription-
based business. The management team is confident that this funding will deliver the growth needed to
deliver our objectives and in turn position Azoomee for a significant trade sale or an IPO. The principal
allocation of the fundraising is as follows:

1. New hires
In terms of people (see Appendix 2) management intend to hire for the following roles once the
fundraising is complete:
- a finance director (this role is currently managed by Douglas Lloyd and means he is not able to
dedicate his time solely to commercial business development);
- a Head of Creative (Estelle Lloyd currently assumes this role alongside the entire content curation
and licensing side of the business. We have identified a senior hire to join from a competitor as
soon as funding is secured);
- four new additions to the marketing team comprising an account manager and a discrete user
acquisition / digital marketing team (3 people) which the business requires to accelerate
partnerships that have and will be signed alongside B2C activity;
- two new content executives tasked with identifying, negotiating and signing content deals in
existing and new markets; and
- a junior software engineer to cover increased front-end development work to cover ongoing
optimisation to the user experience.

2. Content
In the current financial year content costs have remained flat at an average monthly cost of £30,000.
This has been sufficient while we proved product market fit in the UK but needs to be increased to enable
Azoomee to win new partnership deals internationally and to develop a portfolio of its own Azoomee-
branded games. With a much larger library of our own content, Azoomee can reinforce its brand. This
also plugs the gaps of games not currently available on specific topics.
From a licensing perspective, succeeding in the US also necessitates a step change in investment
because of the immediate opportunity to launch a video-based channel (like Azoomee TV on Amazon
in the UK) focused on 21st Century skills. During Q4 2018 and in early January, multiple cable operators
have expressed an interest in working with Azoomee to launch a channel aimed at kids aged 5+ where
they currently have little or no available content. Management have validated the business opportunity
through industry contacts but will need to grow the company’s US video library to win these deals.
The content team has already identified the content assets (games and videos) that need to be licensed
and/or developed as soon as the fundraising is closed, which are associated with the business pipeline
in the revenue projections.

26
3. Marketing and business development
A clear marketing and business development plan will be agreed with the new user acquisition / digital
marketing team to complement existing marketing activities. Increased spend will be focused on offline
and online advertising to acquire users, build consumer brand awareness. It will also be invested in pre-
launch costs in new markets (travel, compliance, operations) and business development (regional
consultants).

4. Contingency
It is management’s view that every fundraising should include some level of contingency, which we have
placed at 15% of the total fundraising. Management has calculated that the current fundraising funds
the business even on a low growth scenario (100% YOY revenue growth), to an exit.

Use of proceeds

New hires (9 staff) £350,000

Content £700,000

Marketing and business development £650,000

Contingency £300,000

Total £2,000,000

27
10. Investment History
Equity
Since the company was founded in September 2014, Azoomee has raised £5.4 million in equity and £0.6
million in convertible loans. To date the business has been funded by HNWIs, many of whom made
money from Douglas and Estelle's previous business venture (http://www.cleanenergypipeline.com/),
which was sold to a FTSE250 media company in December 2011.
The largest shareholders have all invested in excess of £250,000 each. Together, Douglas and Estelle
Lloyd have invested over £0.5 million in the business and are the second largest investors in terms of
invested capital. Following a successful £2 million fundraising, Estelle and Douglas will own c.25% of the
business and remain heavily incentivised to grow the business to a substantial valuation on exit.

Shareholder register
# # of options/ # of shares # of shares
Shareholder name # of shares % shareholding
shareholders warrants (convertible) (fully diluted)

Founders 2 5,526,130 370,000 396,825 6,292,955 29.05%

Employees 16 61,803 1,230,000 79,365 1,371,168 6.33%

Cornerstone (Lead 1 1,592,857 - - 1,592,857 7.35%


Individual investor)

Other external investors 93 12,094,798 80,000 - 12,174,798 56.20%

B shareholders (excl
current & former 335 231,776 - - 231,776 1.07%
employees)

447 19,507,364 1,680,000 476,190 21,663,554 100.00%

Current share price £0.35

Pre-money valuation (fully diluted) £7,582,244

Fundraising £2,000,000

Equity allocated to new shareholders 20.9%

Post £2 million fundraising

Shareholder name # of shares (fully diluted) % shareholding

Founders 6,292,955 22.99%

Employees 1,371,168 5.01%

Cornerstone (Lead Individual investor) 1,592,857 5.82%

Other external investors 12,174,798 44.47%

B shareholders (excl current & former employees) 231,776 0.85%

New shareholders 5,714,286 20.87%

27,377,840 100.00%

28
Since the business was founded, Azoomee has invested approximately £4 million (2/3 of total
investment) in product development, technology and intellectual property. Key areas of investment
include:

1. Scalable technology platform - the business has invested heavily to develop its award-winning
technology platform, with key features as follows:
o core application accessible on any mobile device (Apple, Android, Amazon)
o complementary video and games modules for TVs and hospitality
o supports any media type (videos, games, activities, audio, etc.)
o supports multiple languages
o international availability with remote cost-effective support functionality
o highly scalable infrastructure with asymmetric technical operation costs
o industry leading stability (99.9% service uptime)
2. Intellectual property: From its inception, Azoomee has invested in its brand to ensure that kids
associate with the name and its values. Working with award-winning designers, the team at
Azoomee made a significant investment at a very early stage to create a beautifully-designed
range of characters – the Oomees!
The Oomees are a family of much-loved characters that live within the Azoomee world and play
a large role in making the app engaging and fun for the kids. The Oomees are the avatar of
each child user’s personal profile, and feature heavily in games, chat messaging and creative
activities.

This IP has significant value for the business, its consumers and its partners. The business has
continually demonstrated the substantial (and growing) value of this IP, which is used extensively
by partners including Vodafone, Vodacom and O2 to market Azoomee and their family
propositions online and offline.
For a legal appraisal of our IP Management Policy, please click here.

29
Current debt
Convertible Loan - £150,000 outstanding [8.0% coupon floating over LIBOR – Unsecured]
In 2016 and 2017, Azoomee issued unsecured convertible loans totalling £530,000. Today only £150,000
remains outstanding. This is held by the management team, split between Douglas Lloyd & Estelle Lloyd
(£125,000) and Klaas Ardinois (£25,000). Interest is payable every 6 months on the outstanding principal.
The convertible loans have a 10-year maturity from date of issuance but can only be redeemed before
this date at the request of the company.
HSBC Flexible Loan Facility - £192,000 outstanding [3.2% coupon floating over LIBOR - Debenture]
The company has a flexible loan provided by HSBC secured with a debenture and a joint personal
guarantee provided by Douglas and Estelle Lloyd. This is being repaid on a straight-line basis over four
years. It is the board’s intention to re-finance this loan during 2019 to remove HSBC’s first charge over
the company’s assets.

11. Valuation
The Edtech sector, and specifically kids’ focused Edtech, continues to attract landmark investments. One
of the most exciting success stories in this field is LA-based Age of Learning who raised $150m on a $1
billion valuation in May 2016. Age of Learning trades under the ABCmouse brand. Iconiq (family office
of the Zuckerbergs, Sheryl Sandberg, Reid Hofmann and Jack Dorsey) is the lead investor. ABCmouse’s
current revenue is c.$100m. ABCmouse – Age of Learning’s lead product – operates a similar
subscription business model to Azoomee, and sells for a monthly subscription of $9.95 (Azoomee
charges $6.99). Other recent investment activity includes Kahoot!, a game-based learning platform, that
raised $15.4m (Oct 2018) for a total funding to-date of $58m, valuing it at $300m. Institutional funds are
increasingly active in the sector and already include: Reach Capital, Collaborative Fund, Horizons
Ventures, Insight Venture Partners and NorthZone.
The board believes that if sold as a going concern, taking account of Azoomee’s IP, assets, technical
infrastructure and distribution partnerships, negotiations would commence at a valuation in excess of
£11m and could increase significantly depending on the successful negotiation of certain of the many
business partnership opportunities in the pipeline and/or the level of interest from multiple buyers. This
standalone valuation is supported by Tomorrow Street, Vodafone’s scale up accelerator, who agreed a
valuation of Azoomee at £10.6 million as part of our contract negotiations last year. This is significant
for investors because Tomorrow Street will only receive an exit fee if a deal is agreed at a valuation that
exceeds the agreed baseline of £10.6 million. In short, when they signed the deal Tomorrow Street had
no vested interest in over-valuing the business.
For the purposes of raising additional growth capital to accelerate the company’s international
expansion, the Board has agreed a pre-money valuation of £7.6 million (35p per share) with the
company’s largest shareholders.
The pre-money valuation for this fundraising has been agreed by the Board with input from the
company’s largest shareholders. It has been calculated based on a forward revenue multiple of 2.0x
(current revenue multiple of 8.3x). EdTech companies at a similar stage and growth trajectory to
Azoomee are currently valued on current revenue multiples ranging between 8x – 12x. This valuation is
further supported by the significant investment in and 100% ownership of Azoomee’s award-winning
technology platform and its rich IP asset portfolio comprising its Oomee characters, original games and
videos.

30
It is the combined view of the board and its largest shareholders that this valuation (underpinned by
Tomorrow Street’s benchmark) provides an additional incentive for new investors and current
shareholders to invest given the very exciting stage of development of the company, the significant
business pipeline and the compelling growth dynamics of the global EdTech sector.

Exit opportunity
Douglas and Estelle Lloyd have a successful exit track record; many of the company’s existing investors
invested in their prior business, which was sold successfully on a 7x current revenue multiple in a much
lower growth sector (B2B business media).
Unsurprisingly, the EdTech sector is one of the most dynamic technology sectors right now. Millennial
parents are the largest cohort of parents in the world. Their digital consumption is significantly higher
per capita than all other generations, yet they are currently underserved in their access to engaging
learning content. With two thirds of today’s children born with work in industries that do not even exist
today, there is a desperate need among parents (and society as a whole) for solutions that meet the
needs of modern parents: mobile-first platforms that curate meaningful learning content around 21st
Century skills. Based on the current projections and the business pipeline, management believe that an
exit between £50 million and £250 million is achievable within a 5-year timeframe.
The likely exit route for the business will be a trade sale. Azoomee is already known and stays in touch
with a range of very large global companies including Turner, Amdocs and Pearson all of whom are
potential future partners / acquirers.
For large media businesses, Azoomee offers a logical integration play to integrate their proprietary
content into the Azoomee platform enabling them to drive their digital subscription businesses in the
family segment and reduce reliance on third party distributors where they generate lower margin
revenues from their content.
In the education sector, most educational businesses remain too reliant on their offline business and are
looking to invest in and acquire businesses that enhance their digital capabilities. For instance, Pearson
is interested in adding a gamified learning solution to its K-12 education platform; like many of these
larger companies it is easier to acquire this capability than to build it.
Aggregators like Amdocs have amassed a suite of back-end content solutions enabling them to host
content services to large clients like Virgin Media and Sky. Most lack a flexible end-user platform (and
additional distribution channels) to deliver these solutions to their clients. Azoomee would solve this for
them.
We’re also on the radar of the game industry. Historically the games industry has generated revenues
from advertising via web-based portals. With web-games declining these companies now need a digital
app-based subscription platform as a route to engage with their customers. MTGx and Orange Games
are two companies with a growing kids’ focus that have already expressed an interest in working /
partnering with Azoomee.

31
12. How to invest
Investors wishing to participate in this private offer should apply via Wealth Club Ltd
at www.wealthclub.co.uk. Wealth Club Ltd is authorised and regulated by the FCA. The Company will
pay Wealth Club an arrangement fee of 6% of the amount of share capital subscribed by investors
introduced by Wealth Club Ltd, alongside half yearly investor update fees and a performance fee on
investor exit.
The Company has entered into an agreement with Woodside Corporate Services Ltd to act as receiving
agent for the offer. Woodside Corporate Services Ltd is authorised and regulated by the FCA and has
appropriate FCA permissions to hold client money.

32
13. Appendices

Appendix 1 – Milestones

Signed partnerships (overview)

Partner Type Geography Date agreed

NSPCC Supporting Partner UK Feb 2015

O2 Commercial Partner UK Jul 2016

Amazon (Amazon Commercial Partner UK (US rollout under Nov 2017


Channels) discussion)

EasyJet Marketing Partner Europe Dec 2017

Iberia Express Marketing Partner Europe Dec 2017

XL Airlines Marketing Partner Europe Dec 2017

Volotea Marketing Partner Europe Dec 2017

Tomorrow Street Vodafone Accelerator Global May 2018

Vodafone Malta Commercial Partner Malta May 2018

Wamos Marketing Partner Europe Jul 2018

Air Norstrum Marketing Partner Europe Jul 2018

Pegasus Marketing Partner Europe Jul 2018

Vodacom Commercial Partner South Africa Nov 2018

Infomedia Commercial Partner Global Dec 2018

Sweden (Global rollout


Custos Group Commercial Partner under discussion) Dec 2018

Besafe Online Commercial Partner Europe Dec 2018

SunExpress Marketing Partner Europe Jan 2019

Clear Channel Marketing Partner UK Jan 2019

33
Partnership milestones

NSPCC Partnership
The NSPCC is the UK’s leading children’s charity and is a supporting partner of Azoomee. Based on a
shared belief that children should be safe online, we have been working together since February 2015.
As a part of this partnership, Azoomee can use the NSPCC logo in its marketing – instantly instilling trust
and reinforcing our brand – and receives visibility via the NSPCC and Childline websites, social media
and beyond.

O2 Commercial Partnership (UK)


In July 2016, Azoomee signed a long-term commercial
partnership with the telco O2. As a part of this agreement,
Azoomee is the sole content provider on O2’s Family
Tablet, a proposition including their best-selling tablet,
children’s accessories and a 2-year subscription to
Azoomee. In late 2018 O2 renewed its commitment to the
collaboration, updating the proposition with a far more
powerful tablet, and redesigned marketing assets.

Launch on Amazon Video


In 2017, Azoomee launched its standalone video service,
Azoomee TV on Amazon Video. This service is available
on all Fire TV devices in living rooms, as well as through
the Amazon Video mobile app on iOS, Android and
Amazon devices. This is charged at a monthly
subscription of £3.99.

34
Immfly marketing partnership
In December 2017, Azoomee signed a long-term marketing
partnership with in-flight entertainment company Immfly.
Through this partnership, Azoomee’s games and IP gain
high-profile distribution on flights operated by easyJet,
Iberia Express, Pegasus, Sun Express, Volotea, Wamos and
XL Airways.

High-visibility distribution on the following airlines:

The UK Council for Child Internet Safety brings together more than 200 organisations drawn from across
government, industry, law, academia and charity sectors that work in partnership to help keep children
safe online. Co-founders Douglas and Estelle Lloyd are both associate members of the body.

Tomorrow Street / Vodafone partnership


In April 2018, Azoomee joined Tomorrow Street, a
partnership between Vodafone and the Luxembourg
government, which serves to accelerate the deployment of
innovative technologies to Vodafone’s 550m global
customers across 70 different operating companies.

35
Vodafone Malta – Signed distribution partnership
During the summer of 2018, Azoomee signed a distribution
and marketing partnership with Vodafone Malta, which
acts as a demonstration market for a wider rollout of
Azoomee throughout the Vodafone estate.

Vodafone Malta – World Cup Events Series


In June and July 2018, Vodafone Malta ran a series of live
events using Azoomee games across Malta to coincide
with screenings of the World Cup.

Vodafone Malta – Funland Kids Area


During the July and August 2018, Vodafone Malta and
Azoomee collaborated to create Funland, a children’s
area at the largest family festival in Malta. Funland used
Azoomee IP and games to create a highly successful
online and offline experience for customers.

36
Vodacom South Africa – signed distribution
agreement
Azoomee signed its second Vodafone contract with
Vodacom, Vodafone’s South African operating company, in
late summer 2018 and began commercial operations at the
end of the year.

Vodacom World Kids Area (South Africa)


In November 2018, Azoomee collaborated with Vodacom to
create a showcase kids’ experience in their flagship store.
The Kids’ Area brings together Azoomee games, activities
and educational resources to create a lasting experience
for children.

Member
UK Interactive Entertainment (UKIE) is the only trade body for the UK's games and interactive
entertainment industry. The body supports the growth of businesses in the sector and has a particular
focus on education in STEAM subjects.

Marketing and sales partnership (UK)


Besafe Online provides e-safety training to schools across
the UK. As a part of our partnership – agreed in late 2018 –
Besafe Online will recommend Azoomee as the go-to
service for parents during each session.

37
Marketing and sales partnership
In December 2018, Custos Group signed a strategic
marketing partnership, through its subsidiary Metro Media
House, with Azoomee. As a part of our agreement Metro
Media House will manage all multi-channel marketing
activities in Sweden for Azoomee.

Marketing and sales partnership


In January 2019, Azoomee finalised a long-term marketing
partnership with Clear Channel, one of the leading out of
home advertisers. Focusing initially on the UK market, Clear
Channel will run outdoor advertisements for Azoomee in
more than 900 UK locations, including shopping malls and
supermarkets, with significant footfall among Azoomee’s
target family market.

38
Business Milestones

Horizon 2020 Award


Horizon 2020 is the biggest EU Research and Innovation
programme ever with nearly €80bn of funding available.
Azoomee was awarded a Phase 1 grant in June 2016 and is
now able to apply for the larger Phase 2 grant.

In January 2017, Azoomee was invited to join the prestigious Mayor’s International Business Programme
(MIBP). Organised by the Mayor of London, MIBP is a scheme of mentoring, expert advice and real
business opportunities for high-growth London companies in the life sciences, technology and urban
sectors. During the programme, Azoomee attended trade missions to China and Silicon Valley securing
meaningful introductions to global corporations and accelerating international distribution.

In Summer 2017, Azoomee was welcomed into the third cohort of the Upscale programme. Upscale is a
growth initiative aimed at accelerating UK’s leading scaleups, through workshops, community building
and coaching. 100 companies have taken part in Upscale and collectively raised over $1bn since joining.

Notable alumni

39
Product milestones

International launch (beta)


In November 2017, Azoomee conducted a beta launch, making the product available in more than 60
international markets, allowing the business to conduct detailed operational and technical testing.
confirm the viability of Azoomee outside the UK. and facilitate international partnership and marketing
discussions.

Games portal for the hospitality industry


In early 2018, Azoomee completed development of a web
portal, which allows customers to access its games on any
connected device (PC, laptop, phone, tablet). This service is
under review / in trial with two major hotel chains, with
interest displayed by a range of other firms in the
hospitality industry.

Featured by Apple’
In May 2018, Azoomee was featured as the “App of the
Day” by Apple’s App Store editorial team in the UK. This
high-profile position led to regular features in both the UK
and international app stores.

Internationalisation
In November 2018, Azoomee added support for nine
international languages to the app (English, French,
German, Spanish, Afrikaans, Portuguese, Italian, Greek,
Turkish).

40
Global availability
In late 2018, Azoomee released its app globally through the
app stores, making the product available in to families
across the world and enabling additional B2B2C
partnership discussions to take place.

Awards highlights

BAFTA Nomination (Learning – Primary)


In November 2016, Azoomee’s original series Search It Up
was nominated for a British Academy Children’s Award
Selected in the Learning – Primary category, this
nomination recognised the unique blend of fun and
learning in this original series about online safety.

Innovation of the Year (2016)


In October 2016, was named the Innovation of the Year at
the British Small Business Awards. These awards
recognise the very best startups and small businesses
across the UK.

Winner: Innovator of the Year 2017 (Estelle Lloyd)


The Women in IT Awards series aims to redress the
gender imbalance in technology, by showcasing the
achievements of women in the sector and identifying new
role models.

41
- No. 33 in the Startups 100 list (2018)
- No. 56 in the Startups 100 list (2017)
Startups 100 ranks the UK’s top 100 most awe-inspiring
and fast-growth businesses. Azoomee was No. 56 in 2017
list and climbed to No.33 in 2018.

Longlist: Responsible Business of the Year 2018


In 2018, Azoomee was included in the longlist for
Responsible of the Year alongside major organisations
including Aviva, Lloyds Bank, Morgan Staley, Northumbrian
Water and HMRC

Nominated: CTO of the Year 2017 & 2018


Azoomee CTO Klaas Ardinois has been nominated as CTO
of the Year for the last two years running alongside global
brands including JLL, Ocado News UK, Euromonitor, TATA
and BT.

National Champion 2017


South East Technology & Innovation Award 2017
The National Family Business Awards celebrate
extraordinary and unique family firms throughout the UK.

42
50 Start-Up À Suivre
In November 2018, Azoomee was featured in the
respected Luxembourgish publication PaperJam as one
the 50 Start Ups to watch.

Best Streaming Video Platform 2019


In December 2018, Azoomee was nominated for the Best
Streaming Video Platform award at the Kidscreen
Awards. With the winner to be announced in early 2019,
the awards recognise the most innovative, impactful and
creative children’s media businesses and properties.

Technology Personality of the Year (Douglas Lloyd)

In January 2019, Douglas Lloyd was nominated as Tech


Talks’ Technology Personality of the Year. With the winner
to be announced soon, this award recognises an
inspirational tech leader who support tech for good and
work to fix real problems in society.

Also recognised by:

43
PR highlights

EVENING STANDARD THURSDAY 10 MARCH 2016 33

| News

Search for kittens inspires ‘safe Mexican where


the chillis are all
green… Wahaca
version of internet for children’ scores carbon first
Jonathan Prynn
Mark Blunden

GLENN COPUS
Consumer Business Editor
Technology Reporter
MEXICAN dining chain Wahaca has
TWO London parents have created a become the first restaurant group in
“mini version of the internet” aimed at Britain to be certified carbon neutral.
keeping children safe online. The company, which has 15 outlets in
Entrepreneurs Estelle and Douglas London, said it had used a range of
Lloyd, from Highbury, came up with innovations such as recycling the heat
the idea after their seven-year-old from grills to warm water for the taps

March 2016
daughter Chloe Googled “three kittens” to minimise their carbon footprint.
and found unsuitable content. It has also bought all the energy it uses
The couple, who have two other in the restaurants and head office from
daughters Philomene, nine, and Melu- hydro-electricity generators and uses
sine, two, developed Azoomee, a tablet carbon credits to offset other emissions

Business news covering the


app for primary-age children which is such as those from business travel.
backed by the NSPCC. Content, on iOS The official certification was awarded
and Android, includes videos, games WATCH by the Natural Capital Partners organ-
such as Angry Birds, audio books and THE VIDEO isation, previously known as The Car-
ONLINE
launch of the Azoomee app.
a digital arts and crafts bonNeutral Company.
studio. It is managed standard.co.uk/ Mark Selby, Wahaca co-founder, said:
by a team who familyapp “It’s all part of a journey we started with
include a primary “Walkie-talkie”: Douglas and Estelle Lloyd with daughters, from left, Chloe, Melusine and Philomene and our first restaurant in Covent Garden
school teacher. a tablet displaying their app Azoomee, left. It includes cartoons on internet etiquette and strong passwords where we were determined to prove you
Cartoons teach could build a restaurant business in the
being a good digital of both children to example when there were people being Lloyd, 42, said a key principle of UK with sustainability at its heart.
citizen, internet eti- confirm their identi- beheaded, we thought our children Azoomee is that “when children are on “From humble beginnings in 2007
quette and how to ties and agree to were only two clicks away from ending it they can’t be identified so we abide when we did anything we could think of
create and remember them speaking. up on a video discussing that. by the most stringent data rules about — including reusing wood from the old
strong passwords, Mrs Lloyd, 43, said “My daughter was looking for the what we collect”. dance floor in Covent Garden to build
plus what happens when you post a that when their daughters started using Three Kittens song, if you type that into He added: “It’s like a walkie-talkie — new restaurant walls and persuading
photograph online. the internet they “ended up in places Google you’ll be surprised at what they can talk to each other but no one waiters to segregate waste into seven
Access costs £4.99 a month and there where really children have no place to comes up.” A Google News search for else. There are no group forums bins — we moved to a sophisticated plat-
is a free version with fewer features. be. We’re not talking really scary “three kittens” brings up stories about because we want to avoid the possibil- form where we assess and challenge
A chat function requires the parents things, but certain types of news, for cats dying or being abandoned. Mr ity of cyber-bullying.” @MarkBlunden every element of our business.”

January 2017
Thought leadership leveraging
founder Douglas Lloyd’s
experience in online safety for
children.

March 2017
Expert thought leadership from
Azoomee co-founder Estelle
Lloyd.

44
May 2018
Leading tech-focused business
publication covers Azoomee
joining Tomorrow Street (see
partner milestones for more
details).

July 2018
Debate between founder
Douglas Lloyd and author and
broadcaster Anna Mangan on
the subject of online bullying.

November 2018
Azoomee featured in a list of the
21 best safe gaming solutions for
children.

45
Also featured in:

46
Appendix 2 – Organisational structure

December 2018 Organisational Chart - 16 team members

YE March 2020 Organisational Chart (post fundraising) - 25 team members

47
Appendix 3 – Articles of Association
Tinizine Limited – A certified copy of the Articles of Association are available here.

Appendix 4 – Advance Assurance


The Company has received advance assurance from HM Revenue & Customs that its activities qualify
under the Enterprise Investment Scheme. An initial advanced assurance was provided in September
2015. Since then the company has raised EIS qualifying investment of over £3 million.

Appendix 5 - Risks
This Information Memorandum contains “forward-looking statements” that relate to, without limitation,
the Company’s plans, objectives, goals, strategies, future operations and performance. Such forward-
looking statements involve known and unknown risks, uncertainties and other important factors that
could cause circumstances or actual results, performance or achievements to be materially different
from any future circumstances, results, performance or achievements expressed or implied by such
statements. Such forward-looking statements are based on numerous assumptions regarding, among
other things:

• the performance of the world economy, the British economy and EdTech industry generally;
• the Company’s ability to remain competitive in the EdTech industry and its areas of business
generally;
• the effects of changes in laws, regulations, taxation or accounting standards or practices;
• the Company’s ability to continue to diversify and grow its business;
• the Company’s ability to meet its funding obligations and develop and maintain additional
sources of financing; and
• the Company’s success at managing the risks associated with the aforementioned factors.

The foregoing list of important factors is not intended to be and is not exhaustive. The Company
undertakes no obligation to update or revise publicly any forward-looking statements, whether as a
result of new information, future events or otherwise, except as may be required by law, and all
subsequent written and oral forward-looking statements attributable to the Company or individuals
acting on the Company’s behalf are expressly qualified in their entirety by this paragraph. If one or more
risks or uncertainties materialise, or if the Company’s underlying assumptions prove to be incorrect, the
Company’s actual results may vary materially from what the Company projected. Any forward-looking
statements included or incorporated by reference in this Information Memorandum reflect the
Company’s current view with respect to future events and are subject to these and other risks,
uncertainties and assumptions relating to the Company’s operations, results of operations, growth,
strategy and liquidity. Potential investors should not place undue reliance on the forward-looking
statements which speak only as of the date of this Information Memorandum.

Risk Factors
The Directors believe the following risks to be the most significant for the Company. The risks listed,
however, do not necessarily comprise all those associated with an investment and are not intended to
be presented in any assumed order of priority. In particular, the Company’s performance may be
affected by changes in legal, regulatory and fiscal requirements in any of the jurisdictions in which it or
its subsidiary companies operate or intend to operate.

48
Shareholders should take their own tax advice as to the consequences of owning Shares as well as
receiving returns from them. No representation or warranty, express or implied, is given to investors in
any jurisdiction as to the tax consequences of their acquiring, owning or disposing of any Shares and
neither the Company nor the Directors will be responsible for any tax consequences for any such
investors.
A number of risk factors and uncertainties may adversely affect the Company. These risk factors include,
but are not limited to, financial risks and risks related to the business operations of the Company. If any
of these or other risks or uncertainties actually occurs, the business, operating results and financial
condition of the Company could be materially and adversely affected, which could have a material
adverse effect on the Company's ability to meet its obligations. The risks described below are not the
only ones the Company is exposed to. Additional risks that are not currently known to the Company, or
that the Company currently considers to be immaterial, could have a material adverse effect on the
Company’s ability to fulfil its obligations. The order in which the risks are presented is not intended to
provide an indication of the likelihood of their occurrence or of their relative significance.

Principal risk and uncertainties relating to the Group


The Company’s success depends largely on a single service, the Azoomee mobile application. Azoomee
continues to create complementary derivative products using its core content, most significantly our TV
offering (see section on Amazon in the B2B2C commercial partnerships section) and our web-based
games solution for the hospitality industry. However, the majority of revenues are expected to be derived
from our core mobile application.
No assurance can be given that the Company’s management team will be able to continue the
successful commercial development and distribution of Azoomee on a global scale. Because the
Company has taken the strategic decision to focus primarily on the Azoomee mobile application, the
Company is potentially more vulnerable to unanticipated occurrences than a more diversified business.
The development and commercialisation of the Azooomee app is subject to numerous uncertainties,
including changes in working capital requirements, key personnel availability and the release of
competing products. There may also be additional problems which could adversely affect the
Company’s profitability, including (without limitation) public taste, which is unpredictable and
susceptible to change; competition in the UK and abroad; overseas regulatory environments in relation
to children’s or relevant media; competition with media, games and other leisure activities; advertising
costs; and the failure of other parties to fulfil their contractual obligations and other contingencies.

As an innovative and disruptive growth-stage technology business, it is possible that the


Company may not achieve/maintain profitability.
High-growth digital businesses, like Azoomee, involve a substantial degree of risk, alongside the
possibility for a high to very high return on investment. While every effort has been made to de-risk this
business plan through the development of multiple routes to market, no assurance can be given of the
economic success of any service of this type or the long term profitability of the business. The commercial
success of an application also depends not only on the quality and product-market fit of the Azoomee
offering but also on the quality and acceptance of competing services released into the marketplace at
or near the same time, the availability of alternative forms of entertainment and leisure time activities,
general economic conditions and other tangible and intangible factors, all of which can change and
cannot be predicted with certainty. No assurance can be given that Azoomee will appeal to the public
in key territories or that other services may not be more appealing and therefore reduce the demand
for Azoomee in certain markets. Accordingly, while every effort has been made to mitigate risks, there
remains a possibility that Azoomee will not be commercially successful in certain key territories.

49
The Company may become subject to the risks inherent in international sales.
The Company may commercialise Azoomee through partnerships with international partners in their
respective territories. Consequently, the value of Azoomee as determined by such partners will be
dependent upon many factors, including the local media landscape, the economic conditions in the
relevant territory, and the degree of the partner’s bureaucracy and internal working practices. Economic
downturns, changes in currency exchange rates and changes in economic forecasts of any or all of the
individual territories may materially and adversely affect the Company. Even if distribution or
partnership agreements are obtained for certain territories, economic changes in any territory could
have a material adverse effect on the ability to complete any transaction.
If Azoomee is distributed or licensed in foreign countries, some or all of the revenues derived from such
distribution or licence agreements may be subject to currency movements and other restrictions which
may restrict availability of the funds (such as withholding Taxes). Additionally, some foreign countries
may impose government regulations on the commercialisation of non-local products that may delay
the release, if any, or substantially reduce the commercial opportunity in such countries.

The Company will have to rely on the services of professionals and other key personnel who
may be difficult to replace and the loss of any such persons could adversely affect the
Company’s business.
The Company’s success has been built on and will largely depend on the personal efforts of the
professionals and key management and staff within the Company. If the Company is not able to retain
key personnel, such as the senior management team, key creative department leads, key talent or the
two founders, the loss of the services of such professionals hired by the Company may have a material
adverse effect on the Company. If any one of these individuals becomes incapacitated or otherwise
becomes unavailable, a qualified successor would have to be engaged. Azoomee may be adversely
affected if new personnel must be engaged, or if such personnel demand more favourable
compensation. No assurance can be given that a qualified successor could be engaged.

The proposed withdrawal of the United Kingdom from the European Union.
As at the date of this Information Memorandum, Her Majesty’s Government of the United Kingdom is in
the process of withdrawing from the European Union. The legal, economic, political and other impacts
of this withdrawal process on the Company’s business and affairs are difficult to predict at this time. To
this extent the company has already established a 100% owned subsidiary in Luxembourg to facilitate
trading with countries in the European Union. However, it is possible that the effect of the United
Kingdom’s withdrawal from the European Union could materially impact the Company’s financial
condition and/or its affairs.

50