Deal Review: Sunscreen maker Solar D uses crowd-funding to top up war chest; eyes global rollout
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Nexdius Limited is the owner of the Solar D Skincare Pty Ltd brand of sunscreen products that use patented technology to promote vitamin D levels in the body whilst still protecting the skin against UV rays.
Closing yesterday, Solar D successfully met its minimum target as part of a crowd-sourced funding (CSF) raise with OnMarket. The funds it secured will help in its mission to embed this Australian technology within the global sunscreen and cosmetics industry.
Unlike traditional sunscreens, Solar D exposes more UVB light which the body uses to produce vitamin D. Looking at the management team, CEO Mathew Collett’s resume covers over 30 years of experience in business management, banking, corporate advisory, FMCG and marketing.
Collett developed the product to find a commercial solution for reducing the number of vitamin D deficient individuals.
Nexdius Limited undertook a capital raise via crowd-sourced funding on the OnMarket platform. The company targeted a minimum raise of $500,000 with a maximum figure of $2 million.
The round closed on April 30 having achieved its minimum target with a raise of $719,223 from 324 investors, who collectively will hold an equity interest of around 5 per cent in the company at an indicative valuation of $11.28 million.
The minimum application was $500 per investor, which is higher than some raisings seen on other crowd-funding platforms which have a minimum buy-in of $250. The funds will be used on sales and marketing efforts, working capital and costs associated with the crowdfunding offer.
It is pleasing to note that Nexdius has reached its minimum subscription amount with OnMarket, as the company undertook another crowd-sourced funding raising in March 2018 (with another intermediary) which was unsuccessful, failing to reach the minimum subscription amount by the end of the offer period.
Solar D sales totalled $211,000 in FY17, increasing $338,000 in FY18.The company says its FY19 sales include $250,000 already written plus a large order of $750,000 that it expects to close and book as revenue before the year ended 30 June 2019.
The company is unprofitable at this stage, having made large expenditure in advertising and consultancy expenses. The FY18 balance sheet includes $1.7 million in trade payables, which the company claims it has reduced to just under $1 million.
A notable feature of Nexdius’ share register is the inclusion of some emerging company institutional investors including Thorney Investment Group, led by Melbourne-based billionaire Alex Waislitz, and Monash Investors.
What is unusual is that most CSF deals are targeting seed or early stage capital to get the business going before approaching institutional investors. However, Nexdius already has deep-pocketed investors and is using CSF to essentially top-up and raise working capital.
Prior to closing its CSF raise, Nexdius had raised around $6 million including $3 million from institutional investors.
The global sun care market is estimated to be USD$10 billion with enormous demand from the US, China and Brazil, and growing strongly in developing countries that have high sun care awareness.
Nexdius’ patented formulation allows the body to produce more Vitamin D without any loss in skin sun protection, and the company is hopeful that this technological innovation will be well received and sought after in the global sun care market as well as finding a home in the burgeoning global beauty and personal care market (skin care, anti-aging, etc.)
After a false start in 2018, Nexdius has now successfully completed a CSF rais.e These funds will keep the lights burning for a bit longer as the company attempts to close some larger orders and move towards its ultimate goal — securing global sales agreements and consolidating its international distribution network.