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Tuesday 02 October, 2012

blur (Group) plc

Admission to AIM

RNS Number : 6614N
blur (Group) plc
02 October 2012

2 October 2012

blur (Group) plc

("blur," "the Group" or "the Company")

Admission to Trading on LSE AIM


blur (Group) plc (LSE AIM: BLUR), operator of the Global Services Exchange at, is pleased to announce today details of a placing of 4,878,049 new ordinary shares at a price of 82 pence ($1.33) per share ("Placing Price") raising gross placing proceeds of $6.48 million (£4 million) (before expenses) ("Placing"). On admission to trading on LSE AIM, the Company will have a market capitalisation of approximately $32.6 million (£20.1 million) based on the Placing Price for the entire issued and to be issued share capital of the Company.


Admission and dealings in the ordinary shares of the Company are expected to commence at 8.00am on 5 October 2012 under the ticker symbol BLUR.


Overview of blur Group and the Global Services Exchange.


●   blur Group owns and operates online exchanges where businesses in any country can buy, sell and pay for business services like marketing, advertising and technology. Businesses brief projects and expert service providers pitch for the project and the entire process runs online right through to project delivery and payment.


●   In early 2010, when the Exchange formally launched, just over three briefs per month were submitted. In Q2 2012 this had risen to nearly 60 per month from companies like  the AA, Coral, Exceed, Fantasy World, Red Commerce, Harvey Nichols, the Financial Times, Berlitz, Butlins, GE Healthcare and Tyco. Over the same time, average brief value has grown from approximately $1,500 in 2010 to an average for 2012 YTD of $11,000. Now more than 1,000 briefs have been submitted with a combined brief value of over $13.5 million, with these briefs coming from the US, UK, Europe, Africa and Asia.


●   Today, blur Group has over 20,000 experts, agencies and service provider firms in over 130 countries on six crowd platforms who benefit from networking, peer advice as well as new business opportunities. All are reviewed and approved by the Group's Exchange Support executives before joining. The Company is also building crowds of experts for legal and accounting services, with a view to accepting briefs for these services in H1 2013.


●   Total sales for the six months ended 30 June 2012 were $1,502,000 with an increase in revenues of 75% to $975,000 (H1 2011: $557,000) and deferred revenues of $527,000. EBITDA for the first half was a loss of $483,000 (H1 2011: EBITDA loss of $152,000). The Group now employs 29 full time employees in London and Dallas.


●   The purpose of the IPO is to facilitate access to capital to fund the next stage of the Group's growth, raise the Group's profile as an international technology leader and also support the Group's long term strategic goals. The net proceeds of the Placing are intended to be used in technology development, corporate sales team growth, support services and marketing. 


Philip Letts, CEO and Founder, commented:   "Since 2007 when we started to build our first expert crowd, we have gone from 50 expert service providers to over 20,000 as of Q2 2012.  During this time the number of briefs has increased significantly. Our ambition has always been to build a UK global technology success story and the IPO is a key part in helping us to achieve that goal, and to demonstrate that there is a UK market for technology IPOs. We look forward to a successful future as a public company to the benefit of the Company and our customers, experts, employees and shareholders."


All prices are based on an exchange rate of £1: $1.62


For further information please contact:


blur (Group) plc

Philip Letts, CEO/ Barbara Spurrier, CFO

Tel:  020 3176 0548

Singer Capital Markets

Shaun Dobson / Matt Thomas

Tel: 020 3205 7500

Newgate Threadneedle

Caroline Evans-Jones/ Josh Royston/ Hilary Millar

Tel: 020 7653 9850


Background information on blur Group


blur Group's objective is to become a leading Exchange operator for a range of business services for small, medium and large businesses and so disrupt the traditional way in which service providers are discovered, selected, procured and managed.


blur Group's Global Services Exchange is designed to give corporate buyers access to a larger group of services providers, a shorter project cycle, lower execution costs and, for the service providers, access to a larger group of business customers and lower pitching costs. The Directors believe that significant benefits are therefore derived by both buyer and seller communities, which help to drive new and repeat use, enabling the platform to become self-generating.


In the opinion of the Directors, the scalability of the blur model, in terms of volume, size and value of projects as well as buyer and seller profiles, creates a unique reach and proposition for creative services and business services.


Key Strengths of blur Group


The Directors believe that the key strengths of the Group include:


●   Disruptive, scalable model

●   Proprietary technology platform

●   Cost efficiency and flexibility

●   Crowdsourcing and Expertsourcing

●   Customer base


Business model


There are three main strategic elements to blur Group's business model:


1.     building and maintaining a large crowd of pre-vetted, high quality experts to deliver defined services, utilising advanced social networking platforms and techniques whilst curating the service provider population to ensure its quality, ongoing engagement and delivery ("Expertsourcing");

2.     operating a proprietary online exchange platform to manage the 'connecting, project collaboration and payment process' with a scalable, multi-tiered exchange architecture deployed in a capital efficient cloud, supported by a customer service call centre for larger projects; and

3.     efficient targeting to bring business customers directly to the relevant Exchange via digital and social marketing channels, internet sales and a growing corporate sales team.


The revenue model is driven by blur Group acting as principal for the customer by managing the selection, payment and project collaboration process. The Group currently generates revenues from two sources:


1.     listing fees: buyers pay a listing fee for each brief submitted, equal to 10 per cent. of the brief's value or a minimum of $375. This covers use of the software, access to experts and use of the Exchange support function; and

2.     project revenues: blur collects the total project fees and up to 80 per cent. of this is passed on to the expert supplier. The remainder constitutes blur's project margin.


Current Trading


Current trading continues in line with the Directors' expectations. With the continued growth in core metrics,  over the first two quarters of the year and the Directors' assessment of the strength of the Group's strategy and business model, the Directors have confidence in blur Group's prospects for the rest of the current financial year and beyond.


Market size


The market for services, both creative and business, shows continued growth. Global advertising spend is set to grow by around 10 per cent. over the next two years to approximately $600 billion in 2014 (Source: ZenithOptimedia advertising forecast, June 2012) and the market for IT services was estimated to be $874 billion in 2012 and forecast to grow to $1 trillion by 2016 (Source: Gartner, Inc. April 2012).


The Directors believe that this worldwide market presents a significant opportunity for blur Group.


The Directors believe that around 80 per cent. of projected spend will remain, at least in the short to medium term, with the existing large incumbent suppliers. However, the Directors expect that around 20 per cent. will go to long tail suppliers, whether as an alternative channel based on disillusionment with existing providers, or simply as a more efficient way to select and work with smaller suppliers from both local and geographically distant regions. The Directors believe that the Exchange model provides a streamlined approach to those buyers looking at these alternatives and that blur Group can penetrate this market opportunity.


History and development


In 2005, blur Group founder Philip Letts committed to building a b2b exchange, initially focused around the media and creative industries.


In 2007, the first expert creative crowd,, was launched and by the end of 2007, there were 50 experts on


In 2009, additional exchanges were built for design, marketing and media and the first briefs were tested by attracting them online and fulfilling them through the crowd platforms. By the end of 2009, blur Group had attracted over 3,000 experts to the four Exchanges.


In January 2010, the first full version of the Exchange platform was formally launched, including 'Submit a brief' apps and full customer facing websites. It initially focused on creative and marketing services, generating revenues in 2010 of approximately $240,000. By the end of December 2010, the Exchange had approximately 7,000 experts and 135 briefs had been received, mainly from SMEs, with an average brief value of approximately $1,500.


In May 2011, the technology platform supporting all the exchanges, blur Trading 1.0, was released and this supported a fifth exchange, a business exchange focused around innovation. By the end of 2011, there were 13,000 experts and over 300 briefs had been submitted. Revenues reached approximately $889,000 at the calendar year end. In Q4 2011, an investment round was carried out involving investment in the Group by, among others, Archie Norman, the current chairman of ITV and former chief executive officer and chairman of Asda.


In May 2012, the Global Services Exchange was extended to eight crowd platforms across creative and business services, with six exchanges fully operational. blur Trading 2.0 was launched with the intention of ensuring scalability moving forward. In August 2012, the 1,000th brief was submitted and there are now over 20,000 experts, agencies and service provider firms on the Exchange. The Group is also building crowds in accounting and legal services with a view to accepting briefs in H1 2013.




The Global Services Exchange is enabled by a scalable, cloud-based platform known as blur Trading. From the inception of blur Group, the intention was to develop a platform architecture that would support the goal of the Exchange to change the way that businesses buy services and as a result be streamlined and more cost-efficient. The emergence of cloud technologies has supported this evolution and these technologies now underpin the Exchange technology platform, enabling anyone to brief from anywhere and service providers to pitch from anywhere. A management layer provided by blur Exchange Support facilitates, manages and provides quality assurance on each transaction. The Exchange process takes a user from briefing, using a web-based brief app through to pitch selection, project kick-off, delivery and payment: each of these has multiple components and stages and is run entirely through this platform.


The platform has different online views according to the type of user. Customer accounts and dashboards enable customers to manage their projects from brief to delivery, including rating and reviewing of pitches and experts. Information obtained from such ratings and reviews feeds into expert profiling for future projects. A collaboration space is set up for each project between the customer, expert and Exchange Support. Experts have their own accounts and dashboard including pitch template tools and pitch reviews.


Exchange Support sits between these with a view of the entire database of briefs, experts, pitches and project managed the process.


Board of Directors


Philip Letts (aged 46) - Chairman and Chief Executive Officer

Philip has run a string of high profile web ventures operating across the US and Europe including an established Silicon Valley venture. Philip co-founded in 1998, an internet currency programme. By mid-2000, the business was valued at $300 million in a transaction led by Philip just prior to him being recruited to run Tradaq Inc. was sold privately in 2001 to a US corporation. In 2000, he became CEO of Tradaq, formerly Internet Barter Inc, which became a part of a public company post merger. Following this he was CEO of Surfkitchen which was later sold to SymphonyTeleca.


Barbara Joyce Spurrier (aged 56) - Chief Financial Officer

Barbara is a qualified certified accountant (FCCA) with more than 25 years' experience in financial, business strategy and accountancy roles. She was previously chief financial officer of AIM listed Water Intelligence plc, taking it to reverse acquisition by a US corporation in 2010. She was finance director of a fast moving consumer goods business and was instrumental in securing substantial venture capital finance and EU grant aid and led the sale of the subsidiary Bourne Salads, to Geest PLC. As chief financial officer of a fast growing biotech company, Barbara successfully established a US subsidiary, outsourced its manufacturing needs and evolved its accounting procedures to meet IFRS reporting requirements. In the early part of her career she was a portfolio manager for Rothschilds in Australia.


Kara Cardinale (aged 47) - Head of Exchange Support

Kara is a US entrepreneur with experience in the design and media industry. She started her career in public relations and marketing at Bergdorf Goodman, New York and Giorgio Armani. She then moved to Italy's second largest press agency and spearheaded their growth into corporate video network releases and developed several music news programs for broadcast on Radiotelevisione Italiana S.p.A. as well as regional television networks, in conjunction with BMG and EMI. She built her own design firm and managed artists and their public studios before co-founding in 2007.


Richard William Bourne-Arton (aged 46) - Non-Executive Director

Richard is a clean-tech entrepreneur, with businesses involved in hydro power development and turbine manufacture. He started his career as a technology headhunter, helping as an owner and director to grow, develop and finally sell Talisman to Penna plc in 1999. He continued to assist the growth of the business both organically and through acquisition to become the largest specialist European tech headhunting firm.


Robert James Brooksbank (aged 46) - Non-Executive Director

Robert has been chief financial officer of Carclo plc, the technology-led plastics business, since April 2004. After training with Ernst & Young in London from 1990 to 1993, he qualified as an ACA before working for eighteen months in their Moscow office. After returning to London, he joined Enron Europe in 1995 before taking up a business development director role at his family leather, textile and engineering businesses in 1997.


This information is provided by RNS
The company news service from the London Stock Exchange

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