Campaign Success: Phlo
Phlo is an on-demand digital pharmacy. The company is currently live on Crowdcube and has raised nearly £2m from over 950 investors. We spoke with Founder and CEO, Nadeem Sarwar to hear their Crowdcube success story.
What attracted you to equity crowdfunding?
We have a very engaged patient base at Phlo, and we wanted to extend the opportunity to invest in Phlo to both our patients and supporters. Crowdfunding is an excellent way to do this as we were able to communicate the story behind Phlo, what we stand for, the future of pharmacy and our ambitious growth plans.
We wanted our patients and supporters to have a say in how we shape the future of pharmacy in the UK.
What did you do to prepare for your Crowdcube campaign?
We were able to set up the campaign in a matter of a few weeks. We were time-bound by the terms of our cornerstone investors which meant we needed to act quickly to set up our crowdfunding campaign. Luckily at Phlo, we have a brilliant project team who were able to pull together to execute on all the various elements we needed to launch a successful
We embarked on a pre-launch campaign, designed to entice early investors and give them exclusive access to the investment opportunity before we launched the campaign live to the public. This included a well-designed landing page on our website, a crowdfunding specific animation video, a crowdfunding leadership video with the Senior Management Team at Phlo, integrated email campaigns and social media posts. We also combined these activities with a national PR campaign.
There was a comprehensive compliance process with Crowdcube. This included setting up our pitch page, writing and designing all our investor documentation, and completing all the regulatory compliance procedures that are necessary to run a crowdfunding campaign.
The whole process took just over two weeks.
Before going live on Crowdcube, how much investment did you have pre-aligned?
We had secured £1.6m from cornerstone investors before launch. This gave us a significant investment launchpad, and we were able to build on top of that. It allowed us to reach our overfunding objectives quickly.
Were there any resources or external support
services you used for your Crowdcube campaign?
There are lots of fantastic resources out there for anyone thinking of building a crowdfunding campaign. For us, we looked at some of the most successful pitches on Crowdcube at the time (Freetrade for example) and were able to take inspiration from their campaigns. Being able to learn from other successful pitches is essential.
As the first-ever UK online pharmacy to crowdfund, we had to carve our own path and ensure that we were telling the right story and giving investors all the information that they would require to make an investment decision.
We worked with a talented agency in Glasgow called TooGallus, who helped us to film and edit our crowdfunding video.
What’s been the most challenging part of the process?
Being the first crowdfunding campaign we had launched at Phlo, it was difficult to know what to expect. That, coupled with the short time frame to launch to launch the campaign meant we had a lot of competing priorities throughout the process. Fortunately, we had a strong team from across the business working on the campaign.
Something which we did not anticipate was the amount of work required to set up a pitch on Crowdcube from a compliance perspective. As crowdfunding is essentially classed as a financial promotion, any claim must be evidenced to ensure compliance with the Financial Conduct Authority. There is often a lot of back and forth with lawyers at this stage.
Another challenge for any crowdfunding campaign is ensuring that you keep momentum throughout the campaign. The first and the last weeks are arguably the easiest as you can build excitement and drive a sense of urgency to invest in these weeks. It’s what you do in between that becomes more challenging. For us, that meant regular investor updates, communicating progress, sharing interesting press articles covering Phlo and refreshing our digital ad campaigns regularly.
If you were to launch your Crowdcube campaign again, what would you do differently?
We had a tight timescale for our campaign launch, so I think if we were to do another round, we would allow ourselves more time to prepare and set-up. That being said, there’s nothing like a bit of urgency to drive action, and the team has done a phenomenal job at rising to the challenge.
What do you think has been the key to your Crowdcube success?
We believe that Phlo’s offering of rapid, on-demand delivery of prescriptions is the Pharmacy service of the future. 2020 has put healthcare at the centre of everyone’s lives, be it from a personal standpoint or how we deliver healthcare services in the UK. The backdrop of this renewed focus as a society on healthcare certainly made the fundraise relevant to people’s lives.
We have ambitious growth plans and have been hitting 40% MoM growth
consistently in 2020 which gives our investors’ confidence and lends credibility to our vision for the future of Phlo and the wider Pharmacy sector
On top of the opportunity, the other key factor in our success was running an integrated campaign. We ran a co-ordinated social media, digital and PR campaign to raise awareness of Phlo and our campaign. We also engaged with our existing patient base, who also invested in the campaign.
What would be your top equity crowdfunding tips?
Build a pre-launch campaign; this allows you to start building momentum and build a list of interested early investors. Start with your customers and user base and then use your existing networks to get people excited. Securing a cornerstone investor before launching the campaign puts you in a strong place to reach your target.
Additionally, keep an open dialogue with your investors and potential investors throughout the campaign. Answer their questions promptly and upload detailed documentation that allows them to make that investment decision quicker. Regularly update them when you hit certain milestones or have a great piece of press coverage to share.
Rally your own advocates. Get your employees, friends and family to share the crowdfunding opportunity with their networks for even greater reach; this is especially important if you don’t yet have the funds to pour money into digital marketing ad campaigns.