INDUSTRY USE CASES
VeloMetro
VeloMetro Mobility Inc., based in Vancouver BC, is an emerging leader in shared micro-mobility. Their three-wheeled, enclosed, electrically-assisted vehicle sharing service, called Veemo® offers the benefits of both a bicycle and a car. The vehicle’s patented electric-assist drivetrain makes riders feel superhuman when pedaling, while its enclosure protects the rider from weather and the dangers of the road. Veemo® is provided as a shared service, paid by the minute via a smartphone app. Find and reserve a Veemo® vehicle, ride to your destination, and automatically pay for your trip within the app.
VeloMetro launched a public pilot at the University of British Columbia in early 2018, garnering rave reviews and media coverage from outlets like Fast Company, New Atlas and CBC News. Working with Fundsquire to obtain SR&ED Advance Funding gave VeloMetro the short-term cash flow they needed to secure additional funding. The timing of the SR&ED Advance Funding also coincided with the broadcast of CBC’s Dragons’ Den and the national exposure it provided.
“The timing was perfect, as VeloMetro had a short-term financing gap that they needed to fill”.
Introduction and perfect timing
Fundsquire reached out to VeloMetro through a targeted email. John admits he “usually ignores” these. However, Fundsquire’s international experience in R&D financing sparked enough of his curiosity to reply. The timing was perfect, as VeloMetro had a short-term financing gap that they needed to fill as they were gearing up for their next capital raise. The team saw an opportunity in leveraging their SR&ED credit instead of waiting months for the CRA to issue their refund.
While they had never used SR&ED finance before, they saw that it fit their needs for short-term funding. With their interim cash flow problem solved, they would be free to focus on their fundraising efforts. VeloMetro shopped around, and found that Fundsquire offered both great terms and attentive service:
“Some other providers of SR&ED financing had aggressive terms and conditions. Fundsquire was reasonable, responsive, and competitive in their offer.”
On working with Fundsquire
Fundsquire was responsive and worked well with VeloMetro during the due diligence and loan
monitoring process. VeloMetro made it easy, as they provided the required financials and
supplementary documentation quickly and professionally. When asked what they liked about Fundsquire, VeloMetro replied: “Fundsquire’s terms were competitive. Also, they were easy to deal with and professional in their approach.”
“We were at that period where we hadn’t quite got enough sales going to grab a normal bank loan – as they want to see cash positive sales.”
SR&ED process
VeloMetro’s in-house team has the expertise to complete the technical writing and self-file their SR&ED claim, with some help from their tax advisor who prepares the T2. Whether a company self-files or uses an external consultant, Fundsquire will work closely with them to understand their needs both in terms of funding and potential opportunities. With offices in three major global cities and a network of hundreds of funding professionals and technology experts, Fundsquire is proud to be able to connect and support companies beyond offering financing options.
On the relationship, Fundsquire Managing Director Scott Spence said, “VeloMetro surpassed our expectations with their communications, professionalism, and speed which they filed their taxes and repaid the loan. I’ve happily referred them to other funding sources and companies in our partner network.”
The Final Word
SR&ED Advance Funding allowed VeloMetro to secure further grants and financing by providing added runway and cash flow to cover their operational expenses. The company is now enabled to complete key milestones readying initial production of its shared fleet vehicles during the balance of 2019, further derisking future investment for an initial 2020 commercial service launch.
When asked if they would recommend SR&ED financing to other companies, John replied, “Yes. If your bridge financing builds strength for more investment or facilitates operating cashflow objectives, that will definitely move your company forward.”