Mama Bamboo
Mama Bamboo has developed a range of nappies and baby wipes that are made from organically and sustainably grown bamboo, compostable liners and packaging, and are free from harmful chemicals. Conventional disposable nappies contain plastic and can take around 500 years to degrade in landfill. Mama Bamboo nappies can biodegrade by over 60% within three months and 80% within two years.
The founder, Laura Crawford, established Mama Bamboo in 2018 after having her second child and being dissatisfied with the disposable nappies available on the market due to their impact on the planet and on babies’ skin.
Since its inception in 2018, Mama Bamboo has achieved significant organic sales growth – income for the year ending 31 July 2022 was £1.036 million representing growth of 24% on the previous year.
Mama Bamboo was the first UK nappy and wipe brand to be B-Corp certified and has been voted “Best for the World – Environment” by B-Corp for the last two consecutive years, meaning it is one of the top 5% of all B-Corps globally for environmental impact.
The share offer
Mama Bamboo is seeking to raise £600,000 through the issue of new shares in the company. The funding will be used to support the launch of the recently developed products in the UK, through investing in stock supplies and continued investment in marketing to increase brand awareness and accelerate sales growth.
The funding will also support the expansion of sales into European markets, initially targeting Germany and Italy, allowing for the purchase of stock supplies for European distributors and marketing costs to support this expansion.
EIS tax relief
In December 2022 HMRC provided advance assurance that this share offer should meet the qualifying conditions of the enterprise investment scheme (EIS).
EIS is a tax relief available to individual UK taxpayers who invest in qualifying early stage and growth companies established in the UK.
The main benefits of EIS for investors are the ability to offset 30% respectively of the investment amount against income tax liability for the current year and an exemption from capital gains tax on the disposal of shares after the three-year qualifying period.
The tax treatment of the EIS scheme depends on your individual circumstances and may be subject to change in future.
Key terms
Issuer
Mama Bamboo Limited
Environmental impact
Reducing the number of plastic nappies and baby wipes sent to landfill by providing sustainable alternatives. Plastic nappies are not recyclable or biodegradable in the UK and can take 500 years to degrade.
Term
This is an investment in the shares of an unlisted company and there is no guarantee over the availability or timing of an exit. Investors should therefore be prepared to hold the shares for the long term.
Repayment
There is no set repayment date. The directors of Mama Bamboo intend to procure an exit opportunity for investors after the three-year EIS qualifying period but there is no certainty that they will be successful.
Minimum investment
£66 (3 shares)
Return
A return on investment is likely to be achieved through the receipt of dividends and/or a sale of the company’s shares in the future. Mama Bamboo is not planning to pay dividends for at least three years and any dividends payable after this are dependent on Mama Bamboo’s financial performance.
Offer price per share
£22
Percentage of issued share capital represented by the share offer assuming full subscription
16.5%
Eis
Shares should be eligible for EIS, subject to formal approval by HMRC.
Transferability
The shares are transferable, but they are not listed on any recognised investment exchange, which means that investors will be largely reliant on the directors of the company for procuring an exit. An investor who wishes to sell their shares in the meantime will have to find a willing buyer and agree a price with them, which in practice could be difficult.
Minimum raise
£220,000. If the minimum raise isn't reached, then investors’ monies will be returned.
Timetable
Offer will close on 31 March 2023 unless the £600,000 target has been reached earlier or the offer is extended. Shares are issued 14 days after close.
Risk warning
Investing in the shares of an unlisted company involves a high degree of risk, including potential for loss of capital and future dilution, and lack of liquidity, and should only be considered as part of a diversified investment portfolio.
