$1m investments for Mount company
Posted at 6:43am Tuesday 10 Oct, 2017
DROPIT is a fan engagement app which connects sponsors and teams with fans during 60-second drop auctions in stadium. Supplied photo.
A Mount Maunganui start-up is the talk of the investment community after eclipsing the previous investment record of New Zealand's largest Angel investor group.
Enterprise Angels has pledged more than $1 million to DROPIT, on behalf of its investors.
This is the first time the membership-based investment facilitator has achieved the seven-figure mark with a software company.
DROPIT is an adrenaline-pumping, interactive, fan engagement app connecting sponsors and teams with their fans during exhilarating 60-second drop auctions in stadium.
The mass audience activation platform was created and launched in November 2015 by Mount Maunganui co-founders Peter Howell and Brendan Howell.
Enterprise Angels' unprecedented investment follows on from DROPIT CEO, Peter Howell officially pitching to Enterprise Angels' at their showcase event in August, and a three-year deal that was recently signed between DROPIT and the Phoenix Suns in the world's premier basketball league – the NBA.
More than 180,000 avid fans are expected to interact with the DROPIT app during Phoenix Suns' home games this 2017/18 NBA season.
Enterprise Angels Founder Bill Murphy says that, with due diligence completed, Enterprise Angels can confirm a record amount of investment in this deal including The New Zealand Venture Investment Fund who are taking a larger parcel than usual of US$200,000.
The group's objective is to connect experienced investors with entrepreneurs and innovators.
"The people are important when it comes to investing in companies and the team behind DROPIT are high in energy, talented and very focused," says Bill.
“Unsurprisingly, when the Phoenix Suns deal was announced, we saw a surge in investment in."
DROPIT CEO Peter Howell says the company has a clear goal of focusing on the lucrative segments of the US digital advertising market, and this cannot be achieved without significant investment.
The niche market of in-stadium sports sponsorship is DROPIT's initial focus, with a market opportunity of US$15 to US$20 billion per annum.
“With the US market for digital advertising spend forecast to grow 16 per this year to US$83 billion there is an immense scope for growth. We want to ensure we are fully funded to maximise our opportunity with this multi-billion dollar industry,” says Peter.
“This considerable investment from Enterprise Angels and NZVIF signifies our continued support from the New Zealand investment community towards our growth and expansion from a small-scale start up, into a Kiwi company at the forefront of technological innovation on the global stage.
“DROPIT is now in a strong position to execute on its US expansion strategy, leveraging its innovative technology, strong US distribution relationships and US-based sales and marketing team to encourage further investors to approach DROPIT.”
Enterprise Angels' record investment and the Phoenix Suns partnership caps off a busy few months for the Kiwi start-up, who earlier this year signed a distribution deal with Daktronics, the world's leading manufacturer of electronic scoreboards and digital signage.
The company is also nearing the completion of an equity capital raising process to generate US$3.6m to US$5m.
DROPIT anticipates reaching the target in the coming weeks, with US$3.4m already secured with Enterprise Angels and some of New Zealand's most successful and prominent business people backing the app.
Wholesale investors throughout New Zealand will get the opportunity to look at this deal on AngelEquity, the ‘angel' crowdfunding platform from October 2-9.
In order to list on AngelEquity, a company must receive a minimum of 25 per cent backing by angels or experienced early stage investors and have due diligence undertaken.
The Enterprise Angels members who conducted due diligence on DROPIT were impressed by the strong sales processes and how the founders have surrounded themselves with expert advisers that all have skin in the game.
Visitors to the AngelEquity website can view brief information on DROPIT. However, to protect the privacy of investors and the confidentiality of the investee company information, only registered and verified wholesale investors and angel group members are able to view full details, including due diligence summaries and investor lists.