Facewatch was founded by Simon Gordon in March 2010 when he decided that he needed to do something about the problem of pickpockets stealing from customers in his family owned London business: Gordon’s Wine Bar.
From this start as a simple crime reporting tool, the Company has evolved into a multi-functional crime reporting platform that enables businesses, the police and the public to work together to help reduce high volume low-level acquisitive crime. Functionality includes data sharing and analysis tools; CCTV and image capture (including facial recognition software from partners); crime analytical tools; and secure communication within groups.
Crowdcube investors will know more than most that the holy grail of any internet business is to become a Platform bringing together many partners which cannot be deposed once it has scaled sufficiently. We believe Facewatch is perfectly placed to achieve this goal.
By linking with multiple technologies and systems we have effectively created an Ecosystem with Facewatch as the hub, through which our partners can access our customers and vice versa. Moreover, by adopting an agnostic approach as to which technologies and suppliers our users may want to use in the future, we believe we can future proof ourselves against any new technologies that may appear by simply adding them to the Ecosystem.
We already have system integration to management systems used by police forces; facial recognition systems and CCTV systems.
Why are we on Crowdcube?
We have chosen to raise part of our current funding round through Crowdcube because we felt that it would resonate with the CC community – after all, who isn’t fed up with low level crime?
We also know CC investors want to see good returns and we believe that with your help we can build Facewatch into aglobal brand with a commensurate valuation.
About Our Products
Facewatch currently provides three main products:
Facewatch intends to launch a series of mobile Apps during 2015 to enable wider rollout, for example:
A growing number of companies are eager to join the Facewatch Ecosystem (see image) to make their technology and services available through our platform to the Facewatch Community. By partnering with a range of companies within this Ecosystem, we believe Facewatch can generate revenues from a wide range of partner services and products (similar to the way mobile App stores work).
Revenue Generation
The forecast revenues (all recurring) are from three primary sources:
The forecast ignores soft revenues such as advertising and revenue share from partner products for now, but there will be future opportunities to generate these as user volumes grow.
We provide the Facewatch system either free or at cost to the Police and other Law Enforcement Agencies. By doing this we are securing their early adoption as a vital partner in solving crimes as well as their support in the wider business community, driven by the relentless drive on the Police to find new and innovative ways of meeting demand to reduce crime within shrinking budgets.
Distribution of the Facewatch products is through third parties such as Guarding companies (eg Mitie); Consultancy providers and CCTV installers, as well as directly to major Corporates and Community groups. By distributing through partners and resellers the cost of sales is significantly reduced.
Achievements
So who benefits?
1. Police benefit because Facewatch is free to them and requires no systems integration to get started. The police use Facewatch to receive low-level crime reports from businesses and can quickly and easily view evidence on the go and collaborate with members of the business community to reduce crime.
This can help to save the Police precious time and money, improve crime reporting statistics and their quality of service.
2. Businesses benefit by having a quick and easy means to report crime and liaise effectively with their local police force and other businesses in their area. Benefits to businesses include:
(See image for a recent case study)
The full benefit of Facewatch is realised when businesses share (locally and nationally) information and images to prevent and detect crime. Facewatch is enabling partnerships between many local and Corporate groups to reduce crime through effective collaboration.
Through the creation of industry sector Hubs (eg Retail, Banking, Betting, Leisure), the private sector and the police are better able to make the link between local and national crime. Using facial matching, forensic analysis and mapping software all of which are available on the Facewatch platform, the true extent of organised crime across Companies and Constabularies can now be ascertained.
Local Groups enable businesses within a geographical area or sector to share images of local offenders and to collaborate online to reduce crime whilst at the same time being part of the national Facewatch Platform.
3. The Public benefit because Facewatch leads to reduced crime and a safer environment for everyone.
So what do we need the money for?
We have already invested around £3.6 million over the last 5 years to develop an extremely strong and trusted brand within policing and security.
The new capital is part of a £1.5m funding round and will provide cashflow to accelerate control of the UK market through taking on additional sales resource and the development of future Facewatch modules, as well as providing working capital through to profitability in around two years.
Once the UK bridgehead has been fully established the full rollout of Facewatch globally can commence.
Business Crime and Fraud
The British Retail Crime (BRC) Survey 2014 puts the direct cost of retail crime at £603 million (equating to 3 million offences) with customer theft accounting for 81% per cent of all retail crime by volume. Given the importance of retail to the British economy and our local communities, there is a clear and present requirement to do more to reduce retail crime.
The BRC have promoted, amongst other things:
The Business Crime Strategy (BCS) proposed by the Mayor of London in July 2014 has adopted many of the key themes set out in the BRC’s survey. The strategy sets the context and states that:
“crime against businesses remains significantly under-reported and the police response when reports are made is too often inadequate. Unless and until reporting increases and the response improves we won’t be able to deal with all the forms this threat takes”.
It is generally accepted that so called “shrinkage” runs at around 1% to 1.5% of turnover and with profit margins of around 4% in many of the major retail businesses this means that a staggering 25% of shops in a typical high street retailer are there simply to pay for the cost of shrinkage.
Retail Security
Retail Security is conducted in an ad hoc fashion using a number of different models. Most retail outlets will use a combination of store guards and CCTV. Security may be outsourced to one of a number of security providers who offer a range of security and guarding services or it could be managed in-house. The latter approach may entail the use of security professionals or can be included as part of a store manager’s routine responsibilities.
The quality of CCTV cameras is variable; some may be monitored centrally through Alarm Monitoring Centres; whilst others could be monitored in-house at a control centre located within the store.
Based on the company’s understanding of the market, security is often seen within the retail industry as a necessary evil and the approach is more about minimising further loss rather than about protecting value. There would appear to be a general acceptance that losing up to 1.5% of turnover to shrinkage is a budgeted cost for the business. Heads of security will define success at keeping the loss ratio below their industry norm but are not currently incentivised to make any changes to the way they have operated for many years. Facewatch is now helping to change attitudes at Board level by demonstrating that the cost of crime can be reduced by adopting an integrated approach as outlined in the Facewatch Ecosystem.
The Police
The Police are under constant pressure to reduce their budgets and have suffered significant financial cuts over the last five years. There is little prospect of the situation changing, with further cuts of 15% anticipated within the next Comprehensive Spending Review.
Tackling low-level acquisitive crime is time consuming, resource intensive and can often result in a perceived low return on operational investment. Particularly when there is either no CCTV image or it is of such poor quality that the police have no start point for their investigation other than the description of the perpetrator(s) provided by the victim. When there is an investigation that leads to a successful prosecution, the punishment awarded by the courts for an offence of theft is often seen as ineffective.
The Public and the Victims of Crime: notwithstanding the Code of Practice for Victims of Crime launched in 2013 by the Ministry of Justice (MOJ), victims often feel that little or nothing has been done to address their loss once they have reported a crime to the Police.
Better communication between the Police and the victims of crime is an issue that is regularly identified by Her Majesty’s Inspectorate of Constabularies (HMIC). In light of reduced budgets, the Police are looking for new and innovative ways of engaging with the public that is resource efficient and enables the Police to respond and, wherever possible, to meet the public’s needs.
The internet is increasingly seen as a way for the Police to establish a first point of contact with the public for routine and non-emergency matters. Moreover, the Police are also looking to improve the way in which they can communicate directly on both a routine and an emergency basis with retailers of all description. Facewatch intends to lead this with the recent launch of the first collaboratively produced online crime reporting portal in Hampshire. The Home Secretary announced recently that online crime reporting would be extended more widely and Facewatch is poised to be closely involved.
The Ministry of Justice’s (MOJ) Digital Strategy
This was launched in 2012 in order to:
“…transform the services we provide, the way we work and the systems and processes that underpin these priorities…”
Part of the strategy will aim to create in 2015 a common IT platform and digital data store for information going through the criminal justice system and the courts. The ambition is that, in future, CCTV imagery that is to be used as evidence in court will no longer be played using a DVD or disc but digitally through an Internet based system.
Facewatch is at the forefront of this and is working with the CPS who have recently finalised a legal agreement allowing the CPS to access Facewatch digital evidence files for use in courts.
Competition
Based on the companies understanding of the market, we do not believe that there is currently any other company in the exact space that Facewatch occupies and the intention is to ensure an open system is maintained that will work with others, thereby removing the potential or incentive for anyone to try to occupy our space.
In order to further reduce the likelihood of a serious competitor, Facewatch has trademarked the name globally (all filed but some pending confirmation) and is filing Patents in the USA. It is felt that the powerful UK police brand and the lead that Facewatch has over the rest of the market will act as a significant barrier to entry.
Moreover, our Open APIs on the Platform enable everyone to work with Facewatch and with our first mover advantage in the UK (which is seen as a very strong global security brand) these factors should serve as effective deterrents.
Simon Gordon, Founder and Chairman
Simon Gordon founded Facewatch in April 2010. As well as being the Executive Chairman of Facewatch, he is also the Managing Director of Gordon’s Wine Bar, one of London’s oldest, which dates back to 1890 and has been in the Gordon family for many years.
Simon is a qualified Chartered Accountant. His previous positions include Finance Director of The Skandia UK Group and several other finance roles in the City of London.
Richard Thompson, CEO
In 2012, Richard completed thirty-three years Government service during which time he had extensive policy and operational experience in the security, intelligence and defence world. He was the Chief Constable of the Civil Nuclear Constabulary from 2007 until 2012.
In 2012, he founded Elvaston Global Limited, an international consultancy service; and in 2013 he co-founded and is a Director of Advanced Laser Imaging. He has been a lay member of the Bar Standards Board since 2009 and is the Chairman of their Supervision Committee; he is an Honorary Fellow at King’s College London; an Honorary Fellow of the Strategic Studies Institute at Exeter University.
Andrew Wood, CTO
Andrew is responsible for the design and implementation of the Facewatch system and all IT operations within the company. He started Facewatch as one of the founding Directors, before which he combined running a successful Internet design business with his main occupation of piloting 747 Jumbo Jets. He was also a training Captain for 747 Pilots. Prior to that, he enjoyed a distinguished military career which included being a member of the Blue Eagles Army Helicopter Display Team.
Michael Gordon-Gibson, Police Director
Michael is a former police officer Metropolitan Police Service, where he completed 30 years’ service which included many overt and covert operational roles, including murder investigations. Before joining Facewatch he was Head of Operations for the UK Crimestoppers Trust where he was responsible for their 24/7 public-facing contact Bureau that handles all calls to the charity. Michael was also engaged in strategic liaison with the police and related agencies on behalf of the charity. He served as Crime Stoppers International President from August 2010 to October 2012.
SALES
USE OF FUNDS
EXPENSES AND PROFITABILITY
EXISTING DEBT OR EQUITY INVESTMENTS
CASH
The founder and the directors would like to sell out in the next 5 to 10 years, preferably once the brand is established globally.
The preferred exit is a trade sale but an IPO would be considered, if the valuation and brand benefits were compelling. Potential purchasers include a wide range of global companies such as Cisco, CGI, General Dynamics, Google; but could extend to global consultancies such as Accenture.
Major businesses in the support services, security and facilities management industries are also potential acquirers and Facewatch is already partnering with many of these firms.