Mumbli

The one liner…..Mumbli is a sustainability play on hearing wellness. Well, noise.

Stats for your besties….

o Surveys have shown 86% of adults have left a venue due to noise.

o Mumbli’s research shows conversation is difficult or impossible in 70% of venues.

o Sounds high? The numbers are high. 20 million people in the UK (and 2 billion globally) experience sensitivity to sound or difficulty hearing. Clinically speaking, one in six of the UK adult population are affected/diagnosed with hearing loss. 7 million people in the UK could benefit from hearing aids but only 2 million use them . And, over 5% of the world’s population (466 million) live with disabling hearing loss according to WHO.

The Problem: Social venues are too noisy. Imagine a modern venue without wheelchair access? Now, think about hearing accessiblity and an estimated £20,000 of monthly lost revenues in many venues. Hearing access is a REAL challenge for venues. However, in order to fix this problem there is a twin challenge. First, one has to monitor/measure noise levels. Then, this data must generate actionable insights for staff plus real-time adjustments to the sound profile of a venue. 

The Solution: Mumbli through its installed network of monitoring beacons(average 6 per venue) analyses the soundscape in real time and sends wireless notifications to staff(Bluetooth). This visualisation dashboard can recommend specific actions or, by utilising APIs, adjust sound systems automatically. Mumbli research can demonstrate a 25% improvement on noise levels with access to true data. Apart from superior customer experience, the Mumbli solution addresses two other risks; i) Potential loss of venue licence for repeat violations/complaints (legal maximum 70db after 7pm in UK) ii) Staff litigation for hearing damage can lead to claims of over £40k each. The critical point is that if you can’t monitor(no voice recording ever) sound levels in real-time you can’t fix it.

How does Mumbli make money: Mumbli employs a subscription business model(with APIs it can upgrade to a Monitoring Sound-as-a Service offering) which charges a monthly £25 fee per beacon. So, the average venue, using 6 beacons, will generate £1,800 per annum. The company has completed 10 live pilots since 2021 and there are 200 venues in its pipeline expected to generate £500k of annual recurring revenue(ARR) during 2023.

Opportunity: There are 140,000 food and drink venues in the UK which equates to a £250 million revenue opportunity in the UK alone. However, this is a global access issue which is going to receive ever increasing attention, particularly at bigger venues in receipt of institutional funding. It won’t just be customers complaining about noise levels. Bankers, lenders, shareholders and insurers will be asking difficult sustainability, inclusivity and ESG questions. If just 5% of the UK market recognizes the growing commercial risks of inaction this could be worth £12.5 million of revenues to Mumbli. Also, Mumbli’s WHO-recognised kitemark “Certified for Sound” and £100k of Google credits looks like a very powerful way for venues to demonstrate a commitment to providing an inclusive environment for staff and customers with hearing difficulties or sensitivity to background noise. Mumbli branding has been further boosted by a World-1st Hearing Wellness District at Queen Elizabeth Olympic Park in 2022.

The Financials: £500k has already been invested in the company. Sales projections for 2023 feature a £500k ARR milestone being reached by Q3 and more than 2,000 venues generating £8 million of revenues in 2024. The EBITDA margins of 68% (£5.4m) in 2024 forecast for 2024 did catch the eye given people costs are expected to be £1.1 million. The execution concern here is that sales resources are not deployed aggressively enough to build a nationwide footprint. 

The Team: The founder, Marion Marincat, may have suffered 80% of hearing loss at age 26 but has still managed to successfully build a $100m renewable energy project earlier in his career and achieve a healthcare exit. The Mumbli CTO, Tor Gisvold, brings big corporate weight to the team with senior digital architecture roles in both Toyota and PWC. The mix of neuroscience /audio and tech/engineering(IoT) experience is impressive in what will be a competitive landscape. However, the team might lack some heavyweight venture cap/exit expertise on a strategic level.

The USP: There is a patent pending on the Olympic Park monitoring system but it is highly likely that hearing aid giants(eg Phonak, Widex, GN Resound) are watching this space closely. Noise monitors and data dashboards will be clearly already in their IP libraries. Possibly the bigger concern is that a newer player overtakes Mumbli. If there is one thing that bothers us, it is the relatively slow pace of market entry from Mumbli’s start-up roots in Hackney back in 2018. Speed-to-market and land grab will be critical and it is no surprise that funding monies have been earmarked for the (urgent) recruitment of a Head of Sales and a Head of Marketing. 

Valuation: By now, readers will know that we are reluctant to chase franchise valuations above the £2-3 million range when a company is pre-revenue and all the execution risks are ahead of management. In Mumbli’s case the company is sensibly going for a £3 million pre-money valuation on a funding round of £250,000. EBITDA projections of £380k in Q4 of this year and just under £500k for H2 equate to sub-5x multiples on an annualised basis. On a revenue multiple basis a £3 million valuation allows for a 50% miss on 2024 revenues but keep the multiple below 1x. On both metrics, the margin for error is reasonable for this pre-revenue proposition.

Other Considerations:

Campaign content: The campaign video was professionally done and the investor deck messaging is very effective. As always, we’d like to see more balance sheet and cash flow detail. However, the Mumbli content is definitely above the average seen on crowdfunding platforms.

Social/Financial Media: Mumbli research is being quoted in the UK press which establishes thought leadership effectively. The association with Google and WHO is also a big credibility positive and arguably the “Certified for Sound” badge could be pushed more aggressively.

Funding: In a race for “footprint” and, given the £250 million value of just the UK addressable market, is a £250,000 fund raise a bit on the small side?