Dear , 

Maple Tree Energy was formed in April this year, with a core product offer of Loop Energy Saver, a consumer install, online, electricity and gas residential energy monitor with a built in tariff tracker and switching service in partnership with uSwitch to keep users on the best tariff.

The Market

There are 27m homes in the UK. Independent market research shows that 83% of households consider their energy bills too high with 65% of consumers being interested in devices and Apps that track and manage their energy consumption. UK annual switching rate is only 10% of households with 60% of households having never switched. Average consumer savings by switching are £200 per annum.

The industry is lagging behind consumer demand for more user information and supply flexibility. Utilities have been slow to recognise the value of energy consumption data and have therefore relied on Government legislation to drive smart metering requirements. Whilst a nationwide programme of smart meter deployment is now underway, major issues with this programme exist causing material delays, with scale deployments unlikely to commence before late 2016 at the earliest. 

In parallel to this, the Internet of Things and Connected Home evolution is driving industries outside of utilities to recognise the value of energy consumption data and are starting to consider the type of services that can be offered through accessing this data. We have seen major moves by Apple, introducing iOS 8, incorporating Home Kit as a platform for 3rd party developers to integrate Connected Home propositions into the Apple platform enabling mass market and global reach for new market propositions. Google is active too with their acquisition of NEST (connected heating controllers) for $3bn in 2014 and who have now opened up their API to enable 3rd party developers to interface with Nest products. Also we have seen British Gas launch its Connect Home brand Hive, launching their connected home thermostat, attracting huge advertising expenditure to establish the brand. British Gas also acquired AlertMe in January 2015 for £65m as part of their connected home strategy. 

This fast paced market dynamic is positive, enabling Navetas solutions to leverage opportunities in both the utility and non utility sector to lead cloud based energy management services.

The Technology

Navetas visualises energy consumption, making accurate energy consumption information easily accessible on smart phones and tablets, so that users know precisely how much energy they are using, where they are using it and what it is costing them.

The Navetas Loop Energy Saver is a consumer install electricity and gas energy monitor, providing relevant consumption, spend and savings information to a smart phone or tablet. Features include budgeting to avoid bill shock, real-time spend information and accurate price comparison and switching based on actual consumption. Loop was awarded the Which? Best Buy energy monitor in 2014 and consistently achieves a 4.7 out of 5 star rating on Amazon. More information can be found at on the Loop website here. 

The Model

Loop is a proven product which is available now. The installed population stands at 3,000 user accounts. 

The commercial strategy is to scale Loop deployments and revenue streams through a number of commercial channels:

1. Volume Deployment 

Loop product volume sales strategy comprises of two parts: 

B-C Direct - Focus on internet and retail distribution channels to promote Loop direct to consumers to deliver increased sales. Loop is currently sold through:

• Amazon;
• B&Q; and 
• Navetas has recently launched the Loop online store selling direct through the Loop website. 

Loop is now being stocked by some online retailers, which we are looking to increase in 2015/16. 

B-B-C Partners - Focusing on strategic partnerships to promote Loop to their customer base to drive sales volumes. Target opportunities include utilities, specifically new entrant energy suppliers looking to differentiate their consumer offer through data; more established non big six energy suppliers as an alternative to smart metering and big six energy suppliers as a mechanism to smooth the smart meter roll out and bridge the gap when smart meters fail to be installed. 

2. In App Purchases

Through building a large consumer base of Loop users through the volume deployment strategy and given the consumer engagement achieved through Loop to date, there is a strong value-based proposition to create transactions through the Loop system. 

Trusted Intermediary Services, where Loop provides accurate price comparison and energy tariff switching to ensure consumers are on the best tariff for them, drives switching commission revenues. To grow these a number of enhancements will be offered including In App promotion of switching services, user incentives and ultimately a “just do it for me” button to enable automatic switching when a user can save. 

Loop also creates a market place of users who are engaged and knowledgeable on their energy consumption and spend who are receptive to promotions for energy efficient products e.g. low energy light bulbs, connected heating controls etc. Advertising revenues or sales commissions on 3rd party products sold through Loop will form an additional revenue stream for Navetas.

The Team 

Mike Mannering, Chairman, has 40 years experience in Oilfield Services, currently Director of Songa Offshore 

Chris Saunders, CEO, has 20 years experience in energy management and private equity management 

Erika Emeny, CFO, has over 15 years experience in energy management in Finance, HR and Commercial 

The Investment Case

Loop is strongly positioned as the only combined consumer install electricity and gas cloud based energy monitoring product and service. The product is already revenue generative and this funding round will enable the company to grow its sales and marketing capability, targeting the mass market to grow sales revenues and margin. We see potential extra value in owning the data generated. A further equity funding round will be required, thereafter future working capital requirements are expected to be met through non diluting debt finance. 

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