British startup What3words has launched a crowdfunding campaign that will allow its users to have a stake in the company.
The geolocation app had a target of £1m ($1.19m) but only hours after the campaign went live, it had already hit over £4m. The company said it will use the funds to “replicate our UK strategy around the world” as it looks to become a global standard for location.
It said it already secured “tens of thousands of pre-registrations” ahead of the campaign.
What3words has divided the globe into a grid of 3m x 3m squares, and given each one a unique combination of three words. Its navigation system can pinpoint your location within a single address, or a place with no address.
Through the "always-on" technology, which works without the need for mobile connectivity, new and existing customers are able to navigate to any precise location in the world using just three words.
A square on the street in front of Buckingham Palace, for example, is called options.learns.shock. In Edinburgh, where St Giles’ Cathedral sits, one of the squares reads as regard.grabs.skips. UK houses of parliament is note.slides.forced and Trafalgar Square is powder.logs.evenly.
The fundraising is happening under a convertible structure — the share price and valuation are not set and will be determined by future major investors.
When that future investment takes place, everyone who invested will get shares at a discount of up to 20% off the share price paid by the new investors.
Crowdcube, Europe’s largest crowdfunding platform, is targeted at investors who are sufficiently sophisticated to understand risk and make their own investment decisions.
Investment starts at £10, with no maximum limit, according to the conditions. There will also be a cooling-off period once the round closes — usually seven days — for those who want to change their mind about the investment.
What3words does not make any money through its app or website, making it free for users. Its business model relies on licensing the technology by charging companies to turn What3words addresses into GPS coordinates.
It claims the annual geocoding market is estimated to be worth several billion pounds.
The startup has already raised over £100m in capital from investors including Mercedes-Benz (MBG.DE), Times of India, Sony Innovation Fund (SONY), Subaru (7270.T), Intel Capital, ITV AdVentures (ITV.L) and Channel 4 Ventures.
What3words has been approached for comment.