LONDON – Financial information startup DueDil lost £6.6 million last year on revenues of £2.2 million, new accounts show.
The startup has raised £900,000 through convertible loans so far this year and plans to raise a further £1.1 million using these loans for “working capital” until it raises more equity funding, accounts filed with Companies House this week show.
DueDil has raised $30 million to date from investors including Oak Investment Partners, Notion Capital, and Passion Capital.
The startup was in negative shareholder equity at the end of last year, with reserves down from £1 million at the end of 2015 to a negative balance of £1.8 million.
CEO and cofounder Damian Kimmelman said that while the “optics” of the accounts look bad – loss-making and negative shareholder equity – the business is not in trouble.
Kimmelman told Business Insider in an email: “Companies House only gives you a window into a single moment of time for the company (One of the many reasons why we are working with bank transactional data from open banking.)” The accounts in question cover the period up to December 31, 2016.
DueDil is a lead generation platform that lets you see the financials of private businesses alongside other insights such as sales windows. It aims to become a sort of next-generation Bloomberg terminal for private businesses. Founded in 2011, the startup’s software is used by likes of Xero, LinkedIn, KPMG, and Uber. Clients pay £15,000 a year to use its software.
Kimmelman told BI: “In the last 12 months our competitive landscape has changed dramatically, Bureau Van Dijk [a rival business information business] got sold for $3.3 billion to Moody’s and Dun & Bradstreet [a US business services company] divested its Benelux division. This, along with our much better unit economics, gave our board and management team a clear signal to grow the product and the team and start to compete directly with them.”
He said that the losses were due to investment in “capturing this opportunity.” Losses rose from £5.7 million in 2015 to £6.6 million in 2016, accounts show. Cost of sales rose from £432,774 to £609,512, while administrative expenses jumped from £6.5 million to £8 million.
“The higher costs are the result of growing our product coverage from the UK and Ireland to pan-European, soon to cover 100 million+ companies,” Kimmelman told Business Insider. “We have also significantly grown our team by nearly 30%.”
The number of employees at DueDil jumped from 46 at the end of 2015 to 75 at the end of 2016.
Revenue rose from £1.2 million in 2015 to £2.2 million last year. The results are a long way short of the $10 million (£7 million) in annual sales that DueDil’s CEO and founder Damien Kimmelman forecast in an interview with Business Insider in the middle of last year.
Kimmelman told BI this week that enterprise sales grew by 100% last year but, because DueDil is a subscription service, the revenues from these contracts takes a while to filter through. DueDil had a record first quarter of 2017 and grew 60% between the first and second quarter, he said.
“Over the last 6 months, we have grown sales 5% week over week and are continuing to do so,” he said.
DueDil issued £900,00 of convertible loan notes – a form of debt that can be changed into shares at the discretion of one of the parties involved – earlier this year and plans to raise a further £1.1 million using this method by the end of September, accounts show.
Kimmelman told BI that he, along with co-founder Justin Fitzpatrick, chairman Alan Millard, DueDil’s biggest investor, and outside investors all participated in the convertible loan rounds.
DueDil said in its accounts that the convertible loan issuance this month is to provide working capital “for the period before its next planned equity fundraise.”
Asked if DueDil is currently raising more equity funding, Kimmelman told BI: “I think you can assume that we wouldn’t be so bullish on a convertible if there hadn’t been an immediate liquidity event in sight. I am not trying to be coy but that is all I can say.”