- Projecting a 4-year revenue growth of 120%
- Potential for a SME to save up to £60k on telecoms over five years
Disruptive SME-focused telecoms provider Boom is raising growth capital through Growthdeck, the private equity investment firm.
Boom’s cloud-based enterprise telecoms system has both a wider range of features and a significantly lower wholesale price point than its competitors. The business says that a SME with a call centre function or a phone sales team could save up to £60,000 over five years using its platform compared with other hosted solutions.
The Boom platform allows a business to make and receive calls from any number (e.g. landline, mobile, 0800 etc.) on any device, such as a fixed desk phone, a mobile phone or PC software. This means a call centre can operate with agents using mobile phones or PC software instead of desk phones, and route calls to staff members located anywhere. This negates the need for businesses to purchase fixed desk phones.
The service also includes call/text recording as standard, as well as AI and advanced analytics to analyse customer interactions.
The business is projected to turnover £1m this year at a gross profit margin of 69%. This is forecast to increase to £23.7m in turnover at a margin of 73% by 2023. This growth will be driven by the business gaining a number of major new channel partners who will re-brand Boom’s ‘white label’ product and resell it to their existing end-user customer base.
Potential partners already in advanced negotiations include:
- A major UK mobile network that has already agreed heads of terms
- A large enterprise-focussed telecoms network operator, with heads of terms already agreed
- A number of enterprise telecoms businesses, distributors and data providers
Gartner projects the market for cloud-based telecoms to grow at 16% per annum to 2021, while Global Market Insights predicts the market will be worth $96bn per year by 2024.
The transition to internet protocol (IP) based hosted telephony in the UK market will be accelerated by BT ceasing new ISDN orders from 2020, and switching off its ISDN networks in 2025. According to OFCOM, in 2017 there were over 2 million businesses with an ISDN connection. All companies seeking a new phone system will need to use an IP-based alternative, such as Boom’s hosted service.
The management team at Boom has many years of experience in the telecoms industry, including:
- Founder Martin Boiles, a renowned telecoms entrepreneur, who has built and successfully exited four businesses in hosted telephony and billing services over the last 25 years
- CEO Nick Birtwistle, who spent more than a decade in senior roles at Vodafone, including as Commercial Director for the Enterprise division
- COO/CTO Simon Slater-Thomas, who co-founded telecoms provider Redstone and was Strategy Director through its IPO on the London Stock Exchange
- CMO Derek Owen, who has held senior marketing roles with businesses including Alcatel-Lucent, NEC and B&Q
- Chairman Clive Sawkins, former VP of Cisco, who has also held senior roles with IP telephony giants Avaya and Nortel
Gary Robins, Head of Business Development at Growthdeck, comments: “Boom is exactly the kind of investment that Growthdeck brings to market – a business with a proven disruptive model in a sector undergoing transformation, that is ideally positioned for a period of rapid growth.”
“This is a software-as-a-service business that benefits from substantial margins, and is now looking for the capital to scale up quickly.”
“Boom represents an opportunity to back a genuinely disruptive model of enterprise telecoms, which combines a better service with a lower price point. The pipeline of channel partners in negotiation with Boom reflects industry recognition that Boom’s offering is superior to its competitors.”
Growthdeck’s investment in Boom qualifies for tax reliefs under the Enterprise Investment Scheme (EIS). EIS is an investment scheme that promotes private investment in innovative growth businesses through tax incentives. EIS allows investors to:
- Invest up to £1million per annum in qualifying investments
- Reclaim 30% of the cost of investment against their taxable income
- Not pay Capital Gains Tax (CGT) on any gains where shares are held for at least three years
- Claim income tax relief on any loss that might result from an investment
- Defer capital gains tax on existing assets by re-investing the gain in an EIS-qualifying company
- Save inheritance tax on any EIS-qualifying shares held for over two years
About Growthdeck
Growthdeck offers equity investments in early stage and more established UK businesses to Sophisticated and High Net Worth Investors, with a minimum investment of £5,000.
The company offers a comprehensive service to investors, including detailed upfront due diligence on all investee businesses, post-investment monitoring and reporting and a strong focus on achieving an exit for investors. Its focus is on long-term business viability: companies must have strong management, realistic business plans and operate in growth sectors. The majority of Growthdeck’s investment opportunities will be eligible for tax breaks under the Enterprise Investment Scheme (EIS) or Seed Enterprise Investment Scheme (SEIS).
This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. Your capital is at risk. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
