£207,870 raised of £400,000 target
for 9.10% equity offered
47 investors so far.
Largest: £140,080
‘Headcaster’ is a new app that allows you to voice your messages through animated characters and send them to your crowd. Do you feel like being a different person today? Would your message coming from a cute kitty save the day? Or would your rantings through a flesh-hungry zombie get your feelings across? Perhaps a well-spoken dinosaur might make your point?
Headcaster allows you to select the character that matches your mood to send and receive animated messages to really get people talking. Once a user has downloaded the free app, they can choose from an ever-expanding gallery of characters including a fire-breathing dragon, animals, kooky aliens, dancing robots and even Christmas favourites. Add animations and extras to bring a message to life and then send it just to friends and family or publicly share a video through Twitter, Facebook and YouTube.
We believe that people empathise more with animated characters than they do with normal video or text, so we have given them an interactive tool to use for messaging, and then enjoy as the engagement grows. We have celebrities likeRio Ferdinand on board already who will talk to their friends and fans, using their own customised Headcaster characters. We feel it’s also an ideal platform for branded content for Brands, movies, TV and so on.
The Business Model
‘Headcaster’ is a new social messaging App that has just launched on iOS and Android designed to combine messaging, gaming and a lot of fun. Essentially, anyone can do user-to-user messaging by recording a verbal message on their phone or tablet using one of an assortment of animated characters, and the message is then lip-synced before being sent out (‘headcast’) to their followers who also have the App – so a bit like visual tweeting.
The App is free to download, and our revenue will come from in-App purchases, merchandise and advertising. Like gameplay customization, a user can add seasonal In-App purchases, special characters and extra function packages. Headcasts can also be sent to Twitter, Facebook and YouTube as videos but within the App itself they are fully interactive. All characters respond to touch and movement.
Our customer acquisition will be partly driven by celebrities putting Headcasts in their tweets to their followers. Rio Ferdinand (5.9m [1] Twitter followers), Stephen Fry (8.1m [2] followers) and Robbie Savage (1.4m [3] followers) are on board for the launch and beyond. They will be tweeting Headcasts to their 14 million plus followers. We forecast that the App will be very popular in the social media and gaming markets and will particularly appeal to the 10-35 age group.
The company was founded by Chris Chapman, the CEO, whose career has included time at Spitting Image and an AIM flotation. He has strived to leverage his media and technology experience and network to create and drive the development of this product. Our chairman, Charles McGregor, founded and exited Fibernet and is also chairman of huddle.
Use of Funds
Having raised over £750k to develop and launch the App, we now require a further £500k principally for sales/marketing and more staff.
Currently we have 11 employees, including 7 technology development/creative specialists, plus a sub-contract team of 12 developers and graphic designers. We plan to add at least another 7 staff in 2015, with the team growing to at least 38 people over three years. The team is located in Falmouth, Cornwall and we have a small sales base in London.
Revenue
We forecast that there will have been 2.8 million cumulative downloads of the App by December 2015, and this will have increased to 7.8 million at December 2016. The key assumption behind sales growth is that 15% of users will purchase in-App products and that the average monthly revenue per purchasing user will be 50p. Revenue is supplemented by advertising and merchandise sales.
Technology
For technical robustness the platform is migrated onto the gaming platform UNITY. Our proprietary software has one patent being granted on 17 December 2014[4] and three patents in progress, so we believe we have strong IPR protection and value. An in-house technology team is now established and we forsee the core platform having multiple opportunities for evolution in the future to add even more performance and functionality.
The company has already begun to engage with potential brand customers, such as TV broadcasters.
Users
We believe that the App will be appealing to a wide spectrum of people, with the primary market being high users of multiple types of social media, aged 10 to 35 and both male and female. We see Headcaster used both directly and to augment their Twitter/Facebook/YouTube posts. They should be familiar with customization of characters in computer gameplay and find Headcaster very intuitive.
A secondary segment of users will be those wanting to do ‘Brand Messaging’, with Stars and Brands adding familiar voices and animation to their messaging to their own target markets.
Marketing strategy
The Headcaster App went live on the App Store and Google Play just before Christmas 2014, so that it could be heavily tested by the team and other participants. Subsequently, celebrities such as Rio Ferdinand started to generate and send out their own headcasts in the middle of January. We have made Facebook the easy-to-use registration for release 1.0.
The App was launched with some 20 initial characters in-store, some co-designed with Rio Ferdinand, and in future we plan to add one new character per week.
Our customer acquisition will be driven driven by the following tactics:
Opportunity
We believe that we can be the only app on the market to combine highly animated characters with social messaging, and that this will be a highly attractive proposition for users – see the diagrammatic market view below.
Competition
To the best of our knowledge, no competitor is directly comparable in terms of functionality, particularly animation quality and interactivity. Current offerings are messaging and/or some animation, messaging with photos, video sharing, or pure messaging. We aim to differentiate by combining messaging, animation, a game-type experience and video sharing.
The social media and messaging market is huge, with a large number of players including behemoths such as Facebook and Twitter. We believe we are able to work in parallel with most of the companies in the market i.e. the competitive backdrop is not a mutually exclusive one. See diagram attached.
Market evidence – see footnote[1]
App monetization
A ‘freemium’ model, with some characters free and then in-app buying.
Strategy Users making headcasts drive sales from in-app purchases; viewing of headcasts brings advertising and affiliate revenue too
Primary Revenue to be driven by users making headcasts and buying extras such as seasonal characters, accessories and other features. Building on the familiar model of customization of characters in Gameplay.
One of our major strategic aims is for third parties such as brand names to invest in putting characters in the Headcaster store; and we then split the revenue with them, whilst focusing on the platform.
Secondary Revenue to be driven from ‘Premium’ packages with Celebs and Brands, driving revenue through advertising, affiliate purchases, sponsorship, and digital content (such as special character purchase). We have already opened discussion with a TV broadcaster for use of the platform for broadcast programme content.
Tertiary Revenue to be driven from Meta data value extraction using campaigns for third party products and services.
Chris Chapman – CEO
Chris started as a designer and builder of puppets and characters; he progressed to running the animatronics team at Spitting Image. He co-founded ElekSen, which became the world leader in touch sensitive smart fabrics, with licensees including Orange, Microsoft and Logitech. In 2011 his knowledge of technology and animation came together in a new idea and Headcaster was born.
Charles McGregor – Chairman
Charles spent six years working in data communications at Telephone Rentals, Network Technology and Norand Ltd. before co-founding Fibernet in 1986, becoming CEO in 1993. It was sold to Global Crossing in 2006 for $94.6m. Charles is also chairman of huddle and Gigaclear plc.
Mark Ripley – Chief Technical Officer
Mark’s games portfolio of over 100 games, includes brands such as Harry Potter, The Sims, Pirates of the Caribbean, Final Fantasy, Crash Bandicoot, for clients including BMW, American Express, EA, Disney, BBC, Daily Mirror, Manchester United, Eidos, and Chillingo, as well as many original and self-published games.
Paul Mulraney – Creative Director
Paul has worked for brands such as Endemol and National Geographic as well as agencies including Squash and Tullo Marshall Warren, producing everything from games to websites, interactive experiences and apps, to full multi-channel digital campaigns. He is also a lecturer on the MA in Creative Advertising at Falmouth University.
Jerry Davison – Finance Director
Jerry trained at PwC and then held MD and FD positions within Stagecoach, the transport operator. Then he joined Select Software and took the company to a Nasdaq flotation. In 2000 he joined BCT, one of the UK’s largest tile makers as MD to execute a turnaround. In 2002 he established The Mill Consultancy, a corporate finance specialist. He is a non-exec of two companies.
Laura Giles – Operations Manager
Laura has worked with a wide range of media and entrepreneurial businesses, including the BFI and Cinegi. She has produced corporate events and videos for Unilever and IBM, and worked in advertising with M&C Saatchi. She has also produced a number of short films and an award-winning feature documentary.
The company’s main base is the Innovation Centre on the campus at Falmouth University in Cornwall. Star and Brand business development is driven out of an office in the Shoreditch to Soho creative area!
Our team has built characters for games, Apps for major brands, caricatures at Spitting Image and licensed technology to blue chips. Now Headcaster.