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Northern Wind Ventures

Northern Wind Ventures

Northern Wind Ventures (NWV) invests in high-growth companies. We work actively with our portfolio companies through board representation, financing and business development. This issue of new shares is a great opportunity for new investors to get in on the ground floor at a low valuation, and join NWVs 900 current shareholders on an exciting growth journey. Traditionally, early stage investments in technology companies have not been widely accessible to smaller investors, but NWV makes this exciting world accessible to all. By investing in NWV you help build new tech companies from early stage to IPO, and onwards.

Investor proposal

  1. An IPO is planned for NWV with possible market cap of 50-75 msek. If fully subscribed, investors in this issue could earn a 5x return.
  2. When a company in the portfolio is profitable or nearing IPO, NWV may distribute its ownership in the company as dividends to its shareholders. Furthermore, shareholders may be offered direct investments in NWV's portfolio companies at below market rates.
  3. NWV is raising 10 msek in total in this issue. 2.5 msek has been secured from existing shareholders. The price, 20 öre/share, is very low due to shortterm cash need and not a revelation of investrments.

Product

The problem this product solves

The most crucial years for many growth companies are the few years before an IPO. The company most likely have gained some traction for a commercialized product/service, but are struggling with scaling up their operations and reaching profitability. Rapid growth puts pressure on a company's back-office, financing, strategy, graphics design, recruiting and sales & marketing efforts. These companies often seek partnerships with early investors in order to sustain their growth plans and reach their exit-goals. NWV is a venture building firm that serves this market of early stage high-growth companies with both capital and expertise.

How the product solves it

Capital is necessary, but not sufficient for a fast-growing company. NWV is committed, therefore, to be an active shareholder and help our portfolio companies reach their goals. We select and help companies according to our combined experience in Board duties, investments, finance, IPOs, entrepreneurship and business development. The companies we select have the potential for substantial growth over a one to five-year period, and we aim to realize this value growth through IPO or divestments. In short-term cases we're often only pre-IPO financiers, in other companies we are a long-term growth partner.

Product features

NWV invests in companies that have

  1. Developed products or services that are already commercially on the market
  2. An entrepreneurial team with an innovative company culture
  3. A highly scalable business model

NWV enters at an early stage in order to enable our companies to grow and be refined in a professional and controlled manner. We help these companies reach profitability and facilitate their IPO using in-house expertise, by contributing long-term strategic value within the framework of board representation. Furthermore, we add a large network of professionals in finance, investments, recruitment, business development, legal services, graphics design and accounting.

Product use cases

  • NWV has invested ~ 8 msek in Wizzcom and been the majority shareholder for the past 18 months. Apart from capital, NWV is contributing to Wizzcom with graphics design services, market communication, digital channel strategy, back-office services and accounting. NWV is also represented in the Board of Directors, and have brought in many new investors to Wizzcom in the past year.

  • NWV has helped develop Frogs & Dogs from near bankruptcy to 100 % annual growth since 2014. NWV runs all back-office administration, helps develop digital market channels, and contribute strategically through board representation.

Team

Jan Nilstadius avatar
Jan Nilstadius CFO
Currently CFO at Northern Wind Ventures, Chairman of the board at Frogs and Dogs and Board member at Wizzcom 3D Productions. Focused on financial analysis and forecasts, as well as back-office administration.
Arez  Arazu avatar
Arez Arazu CEO
Currently CEO at Northern Wind Ventures, Board member at Frogs & Dogs. Focused primarily on investor relations, PR, business development, business analysis and opportunity scouting.
Maria Silversken avatar
Maria Silversken Creative Director
Currently Creative Director and Communications Manager at Wizzcom 3D Productions, Creative Director Northern Wind Ventures. Focused on corporate and brand identity, digital strategy and market communication.
Jim Blomqvist avatar
Jim Blomqvist Chairman of the board
Currently Chairman of the board NWV, Board member in listed company Sensori. Jim is a lawyer and very active in supporting the management team working 20-25 hours per week with strategy, negotiations, contracts etc.
Per Eklund avatar
Per Eklund Board member
Currently Board member Northern Wind Ventures, Global Pricing Manager at Sandvik Coromant. Has a lot of experience from several senior managment roles from Swedish industry leaders in marketing, sales and pricing. Per contribute with valuable feedback on these points and especially bring a lot of value to companies looking to ... See more
Currently Board member Northern Wind Ventures, Global Pricing Manager at Sandvik Coromant. Has a lot of experience from several senior managment roles from Swedish industry leaders in marketing, sales and pricing. Per contribute with valuable feedback on these points and especially bring a lot of value to companies looking to expand internationally. See less
Mats Espander avatar
Mats Espander Board member
20 years of experience from senior management within Life Science, and contribute primarily with his extensive expertise in sales & marketing. Mats also has extensive experience from Corporate Finance and professional Board duties, bringing with him a large network of professionals in the finance industry. Currently Board member Northern Wind ... See more
20 years of experience from senior management within Life Science, and contribute primarily with his extensive expertise in sales & marketing. Mats also has extensive experience from Corporate Finance and professional Board duties, bringing with him a large network of professionals in the finance industry. Currently Board member Northern Wind Ventures. See less

Market

Target Market

The number of IPOs for companies below 250 msek market cap has increased a lot in recent years. In 2015 there was almost three times as many small IPOs compared to 2013. It's these companies that NWV strive to identify and invest in a few years before IPO, focusing primarily on IT companies with a market cap of 10-50 msek. In the first six months of 2016, over 12 Bsek was invested in Swedish unlisted tech companies in ~ 170-200 financing rounds. Same period 2014 that number was 2 Bsek, and in 2015 it was 6 Bsek.

Competitive landscape

There's always some degree of competition for the best deals, and the competition has increased in recent years. But this industry in general view "competitors" as a network of co-financing partners. NWV is interested in the same type of companies as VCs like Creandum, North Zone, Accel, EQT Ventures etc. However, NWV operates on a smaller scale than these funds and don't aim for the same scale on exits. NWV is more comparable to companies like FrontOffice and Dividend Sweden, two recently listed companies, that aim to bring smaller companies to the listed markets.

Unique differentiator from competitors

Creating a large shareholder base and distributing ownership among many investors is the most expensive and time-consuming pre IPO activity. NWV is owned by ~ 900 small investors. Our company's structure together with our full-service expertise as a growth partner therefore makes NWV a very attractive investor to IPO candidates. NWV is also an attractive partner to competing investors, since we bring the value differentiator of a large shareholder base to the table. NWV consist of a diverse group of people with different experiences, creating a good mix of a young entrepreneurial spirit together with seasoned advisors and Board.

Company revenue streams

NWV's primary source of revenue is IPOs of our companies. This means much of the revenue is dependant on how successful NWV is with IPOs and divestments. To support this model NWV creates sustainable cash flow for our operations management with three additional revenue streams:

  1. Dividends from portfolio companies
  2. Interest on loans and other financial revenues
  3. Consulting fees. NWV offer supporting services primarily to the portfolio companies, but also to external parties.

Going forward the majority of NWV's future revenue will come from IPOs and dividends, while points 2) and 3) will grow steadily as our portfolio grows.

Product/service distribution

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Execution

Previous milestones/traction

There have been significant changes in NWV in the past few years. The purpose has been to shift direction to more tech focused investments and prepare the company for an IPO. High-lighted milestones:

  1. Number of portfolio companies reduced from 14 to 6 to reflect the new strategy.
  2. Launching a new website to promote a new investment strategy.
  3. New Chairman of the Board and Board of directors to reflect future direction of NWV.

Next key objectives

NWV's goal is to continuously provide our shareholders a return which is much higher than more traditional savings and investments in listed shares or bonds.

The plans for 2017 is to

  1. Diversify our portfolio with 2-4 new long-term investments
  2. Raise a larger round of financing at a higher valuation in the 25-35 msek range

Previous Financing

Parallel to this campaign on Funded By Me, NWVs existing shareholders are also investing in the same issue. The round is open to everyone, but existing shareholders will have a preferential right if the issue is fully subscribed. 2.5 msek has already been raised. If this campaign on Funded by Me of 7.5 msek is fully funded, NWV will receive up to an additional 2.5 msek from larger existing shareholders and thus successfully secure the total issue of 10 msek.

Partnerships

 

Use of funds

If fully subscribed, the total of 10 msek from this issue will be invested as follows:

  1. 5 msek for new investments and business opportunities
  2. 1.5 msek in Wizzcom and NWV will remain the majority shareholder
  3. 1.5 msek in Investor by Crowd to finalise and launch platform
  4. 2 msek for payments and debt regulation

The exit strategy for NWV is an eventual IPO. Our goal is an IPO in 2018 or 2019 at the latest, with a market cap of 50-75 msek for NWV at the time of the IPO.

Risk Analysis

The greatest risk facing investors in this case is the need for new issues to refinance NWV in the future.

However, the valuation in this issue is very low in relation to NWV's holdings and future prospects. The goal is to never issue new shares at a lower valuation than this, in which case new issues would in fact be a healthy sign of growth for NWV.