Kore Labs EIS

Last non-institutional round – fast-growing RegTech platform, more than trebling revenue in two years

Recently named one of Europe’s six most exciting tech companies, Kore Labs Ltd (“Kore” or “the Company”) is an award-winning Software-as-a-Service platform. It digitises financial product management processes to reduce regulatory risks, costs, and time to market. 

The FCA’s Consumer Duty legislation, which came into force in 2023, requires UK financial institutions to maintain a full audit trail for the lifecycle of every product and service they offer. It’s an example of a broader global trend towards increasing regulatory oversight around product lifecycle within the financial sector. 

To comply with regulation, firms face the challenge of having to consolidate data, which is often inconsistent in format, fragmented and stored across a range of different siloed systems. 

Legacy software is often unable to cope, while non-compliance could lead to significant reputational damage and huge fines. 

Kore provides a solution. Despite only launching in 2019, its platform has become mission-critical technology for its customers. It is quick to implement with a light-touch integration and helps customers stay compliant, whilst at the same time significantly reducing time and costs. 

Kore now counts major financial institutions amongst its customers, including two of the UK’s largest banks (Natwest and Lloyds), Italy’s largest bank (Intesa Sanpaolo), two of the top three banks in the Netherlands (Rabobank and ING), and other blue-chip customers, including Investec and FTSE 100 Hargreaves Lansdown.

Prominent organisations, such as Barclays, Deutsche Bank, BNY Mellon, Close Brothers, HSBC and Santander are currently either in pilots or advanced discussions. 

New partnerships with global firms, such as management and technology consultancy Capco – owned by $11 billion revenue Wipro – are intended to help Kore efficiently scale and enter new markets.

Kore is managed by founder and CEO Sabrina Del Prete. An acclaimed FinTech entrepreneur, Sabrina has held strategic senior positions in several blue-chip financial services organisations – including Coutts and Barclays - where she has successfully deployed institutional-level product control technology.

Kore had turnover of £2.3 million in 2023, ending the year with £0.8 million of annual recurring revenue (ARR), up 34% over 2022. In 2024, ARR is expected to reach £2 million. Once the Company achieves £3 million ARR, the Board will carefully select an investor who can help the Company enter the US market. 

Now, to support its scale-up plan and take the Company to profitability, Kore is seeking to raise £5 million. £3 million has been secured: £1 million from existing shareholders and £2 million in non-dilutive grants and a soft loan from Innovate UK, with further grants expected in the coming months – not guaranteed. Wealth Club has an allocation of approximately £1 million. 

Management believes the Company can sustainably grow to c.£42 million ARR and £19 million EBITDA in around 5 years. Predicated on these forecasts, target pre-tax return for this round is approximately 8x net of fees – high risk and not guaranteed. The minimum investment is £20,220 and you can apply online.

If the Company delivers its growth plans, it expects future capital raises to be led by large venture capital or a strategic trade investor – not guaranteed. So, this could be the last opportunity for individual investors to invest ahead of institutions. 

Please read all investment documents prepared by the Company carefully to form your own view.

The deal at a glance

Company by numbers

• 15 blue-chip customers in banking, insurance and wealth management
• 0% customer churn 
• >£4m pipeline
• 120% net revenue retention over the past 14 months
• £2.6 million revenue forecast this year, with £2 million ARR 
• 3.2x revenue growth between 2021 and 2023
• Standard signed contract length: 2 – 5 years 
• Latest contract length: 7 years
• Average onboarding time: 3 months
• Licences forecast to grow from 1,270 to 1,700 this year 
• Over 250 years' combined experience in financial services of management and Board

Risks – important

This is a single company offer with no diversification. It involves investing in an early-stage, loss-making business, which is by nature high risk and prone to failure. There is a risk that the capital raised may not be sufficient to achieve the Company’s objectives. You could lose all the amount you invest.

Like all investments available through Wealth Club, it is only for experienced investors happy to make their own investment decisions without advice.

There is no ready market for unlisted EIS shares: they are illiquid and hard to sell and value. There will need to be an exit for you to receive a realised return on your investment.

Exits are likely to take considerably longer than the three-year minimum EIS holding period; equally, an exit within three years could impact tax relief. The value of tax benefits depends on circumstances and tax rules can change. 

Before you invest, please carefully read the Information Memorandum which contains further details on the considerable risks – alongside the Wealth Club Risks and Commitments.

Fees and structure

Investors will pay no direct initial or ongoing charges to invest. Fundraising costs are being met by the Company. Wealth Club will be entitled to a performance fee on exit. 

Wealth Club investors will invest using a nominee structure. This service is provided by Wealth Club’s subsidiary companies Wealth Club Asset Management Limited (authorised and regulated by the FCA) and Wealth Club Nominees Limited. Wealth Club Nominees Ltd will be completing the share subscription documentation on investors’ behalf.

Please refer to the Schedule of Charges for more details on charges (may vary for different rounds and offers).

All the services Wealth Club and, where applicable, its subsidiaries provide are governed by the Terms and Conditions of the Wealth Club Services.

Our view

Kore has demonstrated solid progress to date. Despite some delays in signing contracts with new large banking clients, the rate of ARR growth has been impressive in our view and demonstrates the Company is successfully transitioning to a SaaS model.

Kore has strengthened its foundations for growth, focusing on the scalability of the platform – obtaining the highest ISO certification which is a requirement to speed up onboarding – and in its people. The Company has passed the highest levels of due diligence and scrutiny required to obtain this ISO and operate in a regulated industry serving global banks as customers. This again speaks to the high level of governance, control and processes within Kore. 

This team has strong industry experience and a track record of previous successes in similar fields and, we believe, the ability, network and status to open many doors to new target customers and routes to market.

Since its platform launch in 2019, Kore looks to have achieved a lot with a relatively modest capital investment of c.£11 million – lower than many other FinTech startups.

The RegTech market is rapidly growing due to tightening regulation; Kore’s technology appears to have achieved good product-market fit and the Company seems well positioned for significant and sustainable growth – not guaranteed.

We consider this a high-quality and compelling, albeit high-risk, EIS investment – you should form your own view.

Register your interest – no obligation

Wealth Club aims to make it easier for experienced investors to find information on – and apply for – investments. You should base your investment decision on the offer documents and ensure you have read and fully understand them before investing. The information on this webpage is a marketing communication. It is not advice or a personal or research recommendation to buy any of the investments mentioned, nor does it include any opinion as to the present or future value or price of these investments. It does not satisfy legal requirements promoting investment research independence and is thus not subject to prohibitions on dealing ahead of its dissemination.