Natural Coatings Group (Natural Paint Co)

By James Mount

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NZ $549,325 pledged


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About

Natural Coatings Group (Natural Paint Co)

 
Natural Paint Co lives by an uncompromising mission; to make the world’s best paint that is better for people and planet. 

 

Meet Grace and James

 

We are Grace and James, co-founders of Natural Paint Co. 

 

Back in 2015, we decided the chemical paint industry needed a shake up and so, we set out on a mission to create the world's best paint - that is better for people and the planet. And we believe we have done just that.

 

After learning the pitfalls of the paint industry, which for over 50 years has favoured petro-chemicals and toxic ingredients, we took a leap of faith, leaving behind our conventional jobs to kickstart our idea to create a natural-based coatings line.

 

Working with leading paint experts, we’ve created natural paints and oils that far exceed industry standards, while solving sustainability and ethical issues within the industry.

 

We are passionate about lifting the lid on this toxic, multibillion dollar industry - changing the way we paint, with purpose!

 

 

Read our full Information Memorandum here

 

Investor Highlights

Big Opportunity - Pioneering innovation in $3B Australasia architectural coatings market.

Positive Impact - 5million sqm of rainforest saved. Certified B-Corp: first and only paint company in Australasia.

Strong Revenue - Over $1m in sales in 
FY23 and $5m+ of lifetime revenue.

Products People Want - Award winning Ecommerce platform and thousands of happy customers.

Superior Technology Advantage - Unique IP based on natural & sustainable ingredients with industry leading quality guarantees.

It's no secret. The paint industry stinks.

 

It’s reliant on petro-chemicals and unsustainable practices, causing negative health effects and damaging our planet. Many paints available on the market today are loaded with toxic chemicals, and research shows that when applied, these chemicals can off-gas for up* to 10 years, particularly in indoor environments. According to the Environmental Protection Agency (EPA), our indoor air quality is on average 2 - 5 times more polluted than outside. When a room is newly painted, the air is up to 1000x more toxic than normal, which can result in a range of acute and chronic human health issues, particularly for people occupying a room for prolonged periods of time. Indoor air toxicity is now one of the top 5 health concerns facing modern society.

 

Read more about the problem in our IM

 

Enter Natural Paint Co - where health, quality and sustainability meet

Health - We’ve replaced the nasty chemicals 
with natural & non-toxic alternatives. 
Unlike other paint brands, we disclose 
the ingredients in our products - that’s a big deal!

Sustainability - Our paint and oil products are made right here in New Zealand. We prioritise ingredients that can be found in nature and are sustainability sourced, using over 80% renewable resources.

Quality - Long lasting, durable and washable, our finishes are all around better than the chemical alternatives. With industry leading guarantees – it can handle all that life throws at it.

 

Paint
is 65% of revenue. Our paints are ultra high-performance with outstanding coverage, durability and washability. Our paint range has 150 timeless, curated colours ​and includes undercoats and topcoats for all surfaces.

Oils & Exterior Stains
35% of revenue. Our range of natural oils provide an excellent alternative to chemical varnishes, offering durability & a fully waterproof finish. Our stains are suitable for application on any interior and exterior timber surface. With excellent UV resistance, our stains last 2-5 years before needing to be re-coated (twice as long as many others).

We have 15 paint & oil products for all interior and exterior application needs.

 

Read more about our products in our IM

Business Model

 

Our NZ made products have been developed by top paint chemists and are made under license with our contract manufacturing partner. We have a strong relationship with our manufacturer that we have built over the last 10 years.

 

 

Our current market split is 85% Direct to consumer (D2C) through our award winning e-commerce platform and 15% recurring revenue through Business to Business (B2B) commercial partnerships.

 

 

Read more about our Business Model in our IM

 

Market Opportunity

 

Environmentally friendly coatings are poised to be the number one growth vertical in the paint industry globally.

 

Natural Paint Co’s unique high-value, low-toxicity position could support an accelerated path of achieving strong market share in Australasia. We believe we are positioned to be at the forefront of changing consumer trends and have security knowing that the market for high performing, healthier coatings will continue to grow globally.

 

“3 out of 5 consumers will swap to a brand if it has a positive social or environmental impact” Youguv

 

 

 

Read more about the Market in our IM

 
Our Growth Strategy

 

As well as growing our offering at home, we have huge opportunities in the $300B international coatings market, with some key products boasting a world’s first in innovative clean and sustainable coatings technology.

We have only just scratched the 
surface of the scope of Natural Paint Co products. With COVID impacts mostly behind us, we plan to execute on exciting new growth strategies that aim to firmly cement Natural Paint Co as a household name in New Zealand and a serious coatings player in the international market over the next 5 years.

Our 3 key growth strategies we plan to execute on with this raise include:

Trade & Commercial Partnerships - Scaling commercial partnerships with developers, painters, architects, building companies and interior designers - helping to bring our products to more commercial spaces in both Aotearoa and Australia

E Commerce (NZ & AU) - We plan to double down on our profitable ecommerce channel, scaling this up both here in NZ as well as launching into Australia.

International Market Exploration- Explore our opportunities in the world's largest paint market - Asia. This could see Natural Paint Co become a serious international coatings player over the next 5 years. This exploration has already begun with our trip to Singapore last year opening up important conversations with potential customers and distribution partners.

By allocating funds to these areas, Natural Paint Co should be well-positioned to scale operations, increase market share, and achieve sustainable growth.

 

Our Financials

You can read our historic financials, forecast financials as well as our assumptions in our full investment document here.

 
Our Offer

 

We are seeking to raise up to $2m
of new growth capital. We require capital in order to take advantage of opportunities to expand our share of the total market in both e-commerce and trade channels, to support working capital requirements and to explore off-shore growth opportunities in Asia and beyond.

We are offering up to 400,000 ordinary shares at $5 each which will equate to 21.91% of the shares in Natural Coatings Group LTD (the holding company of Natural Paint Co LTD). The minimum individual investment is $500 for 100 ordinary shares.

All shares on offer have voting rights and will be held in a nominee. Full rights of shareholders are outlined in our company constitution and shareholders agreement, which all shareholders should read prior to investing. On top of owning shares in the company, we will also be offering 
the investor perks for larger investments. Investor Perks will last for 24 months from the date of the completion of the capital raise. The time the investor perks are valid for may be extended by management and the board or on special request.

We have shown the impact of this round in the share table in our full investment document.

Read more about our Offer in our IM

 

Company Structure

Natural Paint Co LTD is our trading company for NZ/AU and is 100% owned by our holding company - Natural Coatings Group LTD. Investors are buying shares in Natural Coatings Group LTD, which wholly owns Natural Paint Co LTD. This also gives investors additional upside potential, with future expansion into new markets that may be launched as new companies, owned by Natural Coatings Group LTD.

Share Registry Management and Nominee Structure

We are making use of a nominee shareholding structure to simplify the share register. The Ordinary Shares being issued by Natural Coatings Group LTD will be issued to the Nominee, Catalist Nominee Limited, who will hold legal title to those Ordinary Shares in trust for the relevant beneficial owner (i.e. the investor). The full terms on which the Nominee will hold the shares are set out in the Nominee Deed Poll (which forms part of the Offer Documents).

 

Risk Mitigation

 

Competitive Intensity

We expect that competitive intensity will increase over time as a result of both new entrants and growing attention from industry incumbents. We will mitigate this risk in several ways. We will continue to focus on product quality and performance, and exceptional customer service in order to drive brand loyalty. We’ll expand our unique strengths in e-commerce and user experience, while also growing our trade sales channel. Innovation will remain a focus and we’ll stay ahead of the competition by developing products that meet changing consumer needs.

 

Product Quality Control

We have a quality assurance process in place which ensures all products are checked by our manufacturer before delivery to our DC. We conduct further checks before products are sent to customers. Our manufacturer underwrites the 25 year guarantee offered to customers.

 

Key staff members leave

As a small company, the departure of a senior member of our staff could impact our ability to execute our strategy as planned. We manage this risk by making Natural Paint Co an attractive place to work, by adding incentive schemes that may include Employee Share Options, and having favourable notice periods in the contracts of key employees. We maintain a values-led culture, market level remuneration, and a strong connection to the community. We have an appealing brand and growth story and are confident we can recruit top-tier personnel as needed.

 

Working Capital Shortages

Working Capital is an ongoing challenge that needs to be managed carefully. This capital raise should provide sufficient cash to execute growth initiatives without creating undue additional pressure on working capital.

 

Failure to execute on strategy

We actively seek input and counsel from external advisors and employ high-calibre external agencies to help us execute our plans. We plan to expand our governance capabilities following the completion of this capital raise and will introduce more formalised company reporting to track and guide performance and decision making.

 

Economic downturn

We have a nimble cost structure to allow us flexibility in the event of an economic slow-down. Our D2C e-commerce model limits fixed overheads, while strong brand loyalty and product quality insulate us further.

 

 

So are you with us?

Natural Paint Co products are perfectly positioned to be at the forefront of changing consumer trends on an international level. Natural Paint Co. is seeking up to $2M to drive our key growth strategies over the next 3 years. Join our mission and help us to write a new chapter for the paint industry – one that makes a positive impact on both people & our planet.

 

Read the full Information Memorandum here

 

Note from PledgeMe

We have completed Equifax checks on Natural Coatings Group Limited and their Directors, as well as Google and Insolvency checks. There were no adverse findings.

 

Updates 1

Wow - what an incredible first 24 hours!

05/07/2024 at 11:48 AM

We've had an exciting 24 hours at Natural Paint Co HQ. Our capital raise went live at 9.59am yesterday and within the first 4 minutes we had $226,000 pledged! We smashed our minimum target of $300,000 in under 30 mins 🙌

We are completely blown away by YOUR support! We cannot thank those who have already pledged enough! It is with your support that companies like ours have the opportunity to create significant positive change.

The campaign has been open for 24 hours and we are sitting just below half a million pledged. Our upper target is $2M. If you would like to join our mission, but haven’t yet, now’s your chance. We don't want you to miss out!

A reminder that we have $6m of expressed investment interest and with 25% of our target reached already, we are on our way to hitting our maximum!

Some feedback from our Paint Pledger cheerleaders! (Cue the happy tears)

"Great to support a New Zealand company, good for the environment, people's health, and my investment portfolio!"

“I absolutely love the Natural Paint Company. So proud and excited to be able to invest in the growth of your business!"

“Investing for a sustainable company like Natural Paint Co is what I live for. Their paints are actually amazing too and also it’s kiwi owned!"

“Currently redecorating my bedroom pregnant and not worried at all about breathing in chemicals thanks to my paints from Natural Paint Co!”

Your early investment helps to drive the success of the overall raise and therefore the success of your shares! It shows that people believe in the vision of Natural Paint Co.  Let's crack our maximum goal!

Thank you for your incredible support so far to help change the dirty paint industry for good! We are so excited for these next few weeks and beyond.

Grace, James & the NPC Crew

    Details

    Offer Details

    Current Valuation 7,126,270
    Raise Minimum 300,000
    Raise Maximum 2,000,000
    Share Price 5.00
    Minimum Pledge 500.00
    Maximum Shares Offered 400,000
    Explanation of valuation:

    Our pre-money valuation of $7,126,270 has been completed by our board and advisors. This valuation is based off year 1 forecasted revenue at a 4x multiple and then a further discount of approx. 10% applied.

    Company Details

    Company Name: Natural Coatings Group Limited

    Company Number: 8177513

    Company Documents

    Business Plan

    (application/pdf, 10.7 MB, uploaded 03 July 2024)

    Natural_Coatings_Group_LTD_-_Shareholder_Agreement___Amendment_(previously_NPC_Holdings_Ltd).pdf

    (application/pdf, 766 KB, uploaded 02 July 2024)

    Nominee_Deed_Poll_Natural_Coatings_Group_1_.pdf

    (application/pdf, 248 KB, uploaded 02 July 2024)

    Natural_Paint_Co_-_Company_Extract_(wholly_owned_subsidiary).pdf

    (application/pdf, 744 KB, uploaded 02 July 2024)

    Natural_Coatings_Group_-_Company_Extract.pdf

    (application/pdf, 745 KB, uploaded 02 July 2024)

    Natural_Coatings_Group_-_Certificate_of_Incorporation.pdf

    (application/pdf, 588 KB, uploaded 02 July 2024)

    Natural_Coatings_Group_Ltd_-_Constitution.pdf

    (application/pdf, 587 KB, uploaded 02 July 2024)

    Director Details

    Name Role Profile URL Invested?
    Grace Glass Director/Co-Founder https://www.linkedin.com/in/grace-glass-4a595918b/
    James Mount Director/Co-Founder https://www.linkedin.com/in/james-mount-380242102/

    Questions 5

    Ask a Question (You must login to ask a question)


    Is it standard practices for companies to include GST in there revenue figures. In multiple place you quote $1M+ revenue - including in the investor highlights. However in the actual financials a figure of closer to $900k is used. By including GST in these headline results are you not misleading 'investors'?

    Posted on 15-07-2024 by Adrian Edge

    Hi Adrian

    The information in our IM has been put together with input and support from our board, mentors and advisors and we feel confident that the information in it is accurate and reflects the business and the financials clearly. We are transparent throughout the IM where we have taken total revenue (inc GST) and it is standard for the P&L to state numbers as ex GST. 

    If you have more detailed questions, I would welcome you to call us or email [email protected] where we can answer further questions in a longer form dialogue.

    Many thanks
    James

    Answered on 15-07-2024 by James Mount


    Kia ora NPC team,
    we have in our mind positioned ourselves in investing in positive impact NZ starting up companies.
    We nearly committed until we found a paragraph stating that the Company will be positioned to ideally eventually be sold to a big player. Dang.
    Why would you put all the effort in to create a great brand and product to sell to the devil.
    Certainly not what we want to invest in.
    So just curious what drives this statement? It has robbed us of our enthusiasm to invest in what we thought “good new NZ Company doing good things.
    Interested in your comments/thoughts.
    Ellen

    Posted on 14-07-2024 by Ellen

    Hi team, your valuation is based on a 4x muliplier of forecast revenue. This equates to a forecast revenue toward $2Million. That is nearly double your current revenue. Is this actually likely? Given you are $6M short of your 23 forecasts provided during your Snowball Effect raise.

    Posted on 08-07-2024 by Adrian Edge

    Hi Adrian

    We feel confident in our financial projections and have included both a bronze (conservative growth model) and a gold model (which is our stretch model or “best case” scenario). These projections have a robust 3 year working financial model underpinning them created by our board with the support of a chartered accountant. You can find these models and revenue assumptions information on pages 43 - 45 in our IM.

    The revenue number you are referring to was from the equivalent of our “best case” scenario model 3+ years ago. Many of the growth strategies planned from our previous raise were unable to be realised in full due to the impacts of covid (commercial growth and exporting) which were large contributors to the previous revenue assumptions. However, you will see we have still achieved strong growth since FY21 which you can find on our financials page (page 42).

    Our bronze model includes revenue in the commercial space of $750k in NZ and $150k in AU, which is based on closing approx 20-30 clients at an average monthly spend of $5k. We believe this is a conservative estimate of what our team could achieve in market, especially given it is less than 0.2% of the total commercial market and we already have strong demand from specifiers ready to work with us once we have colour fan decks (which is one of our main bottlenecks for growth currently). The model also accounts for 4-5% month on month growth in the ecommerce space, supported with a soft launch into AU.

    Natural Paint Co has matured considerably over the last 3 years. We believe we are well set up for success with a clear and focused strategy and 3 more years in the market, learning from our many wins as well as from our challenges. These learnings are invaluable to take us forward on our growth journey.

    We also have a much more experienced founding team and are supported with a stronger advisory board and a market more primed than ever for our product offering.

    We recommend judging the investment opportunity on its merits as it is currently and not what the business was 3 years ago.

    Thank you for your question and support!
    James

    Answered on 09-07-2024 by James Mount


    Hi team. Since the company holds no patents, what's to stop any of the incumbent paint manufacturers from creating similar or even better paint formulations than yours?

    Posted on 06-07-2024 by Cristian

    Hi Cristian

    We address this question and why we believe we have a strong competitive advantage against the bigger chemical incumbent on pages 47 and 48 in our IM. Page 48 specifically talks about our competitive moat and the barriers to entry for an existing competitor to enter our space.

    On the topic of patents, these are not common for the paint industry for product formulations. Primarily as the cost/benefit is not there for us at this time. We hold IP in our product formulations that is unique to us (discussed on page 27 of IM). However, product formulations are adapted and enhanced as new materials/ technology is developed in the industry to ensure we are at the front of the competition with our innovation so a patent on paint can limit the agility required to constantly innovate and upgrade products as technology advances.

    We may look to secure patents in the future for new innovation (primarily thinking of deep tech) where the technology may wish to be licensed internationally.

    Many thanks for your question!

    Answered on 09-07-2024 by James Mount


    Hi there, sorry if I have missed this info somewhere, but can you tell me if you (or someone else on your behalf) does animal testing?

    Posted on 05-07-2024 by Natasha

    Hi Natasha

    Thank you for your question! We 100% do not test on animals nor does anyone on our behalf. We are also B-corp certified, which involves upholding rigorous ethical standards for both ourselves and screening our suppliers.

    Many thanks!
    James

    Answered on 06-07-2024 by James Mount

    Pledgers 201

    suzanne Parsons
    15/07/2024 at 12:11pm
    Jack Kennedy
    14/07/2024 at 9:03pm
    Rosie
    14/07/2024 at 6:40pm
    Luke Davidson
    14/07/2024 at 6:35pm
    Monique
    14/07/2024 at 6:27pm
    Anna Groot
    13/07/2024 at 6:50pm

    "Love your mahi NPC!"

    Kelcey
    13/07/2024 at 2:07pm
    Sarah
    13/07/2024 at 9:07am
    Tanya
    12/07/2024 at 10:35pm
    Rob Carr
    12/07/2024 at 9:10pm
    Evan Batchelor
    12/07/2024 at 7:34pm
    Nick Fitzpatrick
    12/07/2024 at 6:25pm
    Robert Dew
    12/07/2024 at 4:35pm
    Claire Teschendorf
    12/07/2024 at 4:05pm
    Alastair
    12/07/2024 at 3:22pm
    Sharnah
    11/07/2024 at 9:57pm
    Lu...
    11/07/2024 at 8:26pm

    "Love what you're doing. Kia kaha!"

    Grace Crawford
    11/07/2024 at 2:57pm
    James
    11/07/2024 at 11:43am
    Jodie Bell
    11/07/2024 at 10:16am
    Dope Honey Limited
    11/07/2024 at 9:20am
    Chantelle
    09/07/2024 at 10:48pm
    Cameron
    09/07/2024 at 9:03pm
    Ngakau
    09/07/2024 at 6:46pm
    TONY PEARSON
    09/07/2024 at 11:35am
    sam
    09/07/2024 at 10:03am

    "Our company comrade! lemme drive our ute after dance! >: O "

    Jae Barrett
    08/07/2024 at 10:13pm
    Kate Henderson
    08/07/2024 at 9:25pm
    Robyn
    08/07/2024 at 8:54pm
    Natasha
    08/07/2024 at 1:29pm

    Natural Coatings Group (Natural Paint Co)

     
    Natural Paint Co lives by an uncompromising mission; to make the world’s best paint that is better for people and planet. 

     

    Meet Grace and James

     

    We are Grace and James, co-founders of Natural Paint Co. 

     

    Back in 2015, we decided the chemical paint industry needed a shake up and so, we set out on a mission to create the world's best paint - that is better for people and the planet. And we believe we have done just that.

     

    After learning the pitfalls of the paint industry, which for over 50 years has favoured petro-chemicals and toxic ingredients, we took a leap of faith, leaving behind our conventional jobs to kickstart our idea to create a natural-based coatings line.

     

    Working with leading paint experts, we’ve created natural paints and oils that far exceed industry standards, while solving sustainability and ethical issues within the industry.

     

    We are passionate about lifting the lid on this toxic, multibillion dollar industry - changing the way we paint, with purpose!

     

     

    Read our full Information Memorandum here

     

    Investor Highlights

    Big Opportunity - Pioneering innovation in $3B Australasia architectural coatings market.

    Positive Impact - 5million sqm of rainforest saved. Certified B-Corp: first and only paint company in Australasia.

    Strong Revenue - Over $1m in sales in 
FY23 and $5m+ of lifetime revenue.

    Products People Want - Award winning Ecommerce platform and thousands of happy customers.

    Superior Technology Advantage - Unique IP based on natural & sustainable ingredients with industry leading quality guarantees.

    It's no secret. The paint industry stinks.

     

    It’s reliant on petro-chemicals and unsustainable practices, causing negative health effects and damaging our planet. Many paints available on the market today are loaded with toxic chemicals, and research shows that when applied, these chemicals can off-gas for up* to 10 years, particularly in indoor environments. According to the Environmental Protection Agency (EPA), our indoor air quality is on average 2 - 5 times more polluted than outside. When a room is newly painted, the air is up to 1000x more toxic than normal, which can result in a range of acute and chronic human health issues, particularly for people occupying a room for prolonged periods of time. Indoor air toxicity is now one of the top 5 health concerns facing modern society.

     

    Read more about the problem in our IM

     

    Enter Natural Paint Co - where health, quality and sustainability meet

    Health - We’ve replaced the nasty chemicals 
with natural & non-toxic alternatives. 
Unlike other paint brands, we disclose 
the ingredients in our products - that’s a big deal!

    Sustainability - Our paint and oil products are made right here in New Zealand. We prioritise ingredients that can be found in nature and are sustainability sourced, using over 80% renewable resources.

    Quality - Long lasting, durable and washable, our finishes are all around better than the chemical alternatives. With industry leading guarantees – it can handle all that life throws at it.

     

    Paint
is 65% of revenue. Our paints are ultra high-performance with outstanding coverage, durability and washability. Our paint range has 150 timeless, curated colours ​and includes undercoats and topcoats for all surfaces.

    Oils & Exterior Stains
35% of revenue. Our range of natural oils provide an excellent alternative to chemical varnishes, offering durability & a fully waterproof finish. Our stains are suitable for application on any interior and exterior timber surface. With excellent UV resistance, our stains last 2-5 years before needing to be re-coated (twice as long as many others).

    We have 15 paint & oil products for all interior and exterior application needs.

     

    Read more about our products in our IM

    Business Model

     

    Our NZ made products have been developed by top paint chemists and are made under license with our contract manufacturing partner. We have a strong relationship with our manufacturer that we have built over the last 10 years.

     

     

    Our current market split is 85% Direct to consumer (D2C) through our award winning e-commerce platform and 15% recurring revenue through Business to Business (B2B) commercial partnerships.

     

     

    Read more about our Business Model in our IM

     

    Market Opportunity

     

    Environmentally friendly coatings are poised to be the number one growth vertical in the paint industry globally.

     

    Natural Paint Co’s unique high-value, low-toxicity position could support an accelerated path of achieving strong market share in Australasia. We believe we are positioned to be at the forefront of changing consumer trends and have security knowing that the market for high performing, healthier coatings will continue to grow globally.

     

    “3 out of 5 consumers will swap to a brand if it has a positive social or environmental impact” Youguv

     

     

     

    Read more about the Market in our IM

     
    Our Growth Strategy

     

    As well as growing our offering at home, we have huge opportunities in the $300B international coatings market, with some key products boasting a world’s first in innovative clean and sustainable coatings technology.

    We have only just scratched the 
surface of the scope of Natural Paint Co products. With COVID impacts mostly behind us, we plan to execute on exciting new growth strategies that aim to firmly cement Natural Paint Co as a household name in New Zealand and a serious coatings player in the international market over the next 5 years.

    Our 3 key growth strategies we plan to execute on with this raise include:

    Trade & Commercial Partnerships - Scaling commercial partnerships with developers, painters, architects, building companies and interior designers - helping to bring our products to more commercial spaces in both Aotearoa and Australia

    E Commerce (NZ & AU) - We plan to double down on our profitable ecommerce channel, scaling this up both here in NZ as well as launching into Australia.

    International Market Exploration- Explore our opportunities in the world's largest paint market - Asia. This could see Natural Paint Co become a serious international coatings player over the next 5 years. This exploration has already begun with our trip to Singapore last year opening up important conversations with potential customers and distribution partners.

    By allocating funds to these areas, Natural Paint Co should be well-positioned to scale operations, increase market share, and achieve sustainable growth.

     

    Our Financials

    You can read our historic financials, forecast financials as well as our assumptions in our full investment document here.

     
    Our Offer

     

    We are seeking to raise up to $2m
of new growth capital. We require capital in order to take advantage of opportunities to expand our share of the total market in both e-commerce and trade channels, to support working capital requirements and to explore off-shore growth opportunities in Asia and beyond.

    We are offering up to 400,000 ordinary shares at $5 each which will equate to 21.91% of the shares in Natural Coatings Group LTD (the holding company of Natural Paint Co LTD). The minimum individual investment is $500 for 100 ordinary shares.

    All shares on offer have voting rights and will be held in a nominee. Full rights of shareholders are outlined in our company constitution and shareholders agreement, which all shareholders should read prior to investing. On top of owning shares in the company, we will also be offering 
the investor perks for larger investments. Investor Perks will last for 24 months from the date of the completion of the capital raise. The time the investor perks are valid for may be extended by management and the board or on special request.

    We have shown the impact of this round in the share table in our full investment document.

    Read more about our Offer in our IM

     

    Company Structure

    Natural Paint Co LTD is our trading company for NZ/AU and is 100% owned by our holding company - Natural Coatings Group LTD. Investors are buying shares in Natural Coatings Group LTD, which wholly owns Natural Paint Co LTD. This also gives investors additional upside potential, with future expansion into new markets that may be launched as new companies, owned by Natural Coatings Group LTD.

    Share Registry Management and Nominee Structure

    We are making use of a nominee shareholding structure to simplify the share register. The Ordinary Shares being issued by Natural Coatings Group LTD will be issued to the Nominee, Catalist Nominee Limited, who will hold legal title to those Ordinary Shares in trust for the relevant beneficial owner (i.e. the investor). The full terms on which the Nominee will hold the shares are set out in the Nominee Deed Poll (which forms part of the Offer Documents).

     

    Risk Mitigation

     

    Competitive Intensity

    We expect that competitive intensity will increase over time as a result of both new entrants and growing attention from industry incumbents. We will mitigate this risk in several ways. We will continue to focus on product quality and performance, and exceptional customer service in order to drive brand loyalty. We’ll expand our unique strengths in e-commerce and user experience, while also growing our trade sales channel. Innovation will remain a focus and we’ll stay ahead of the competition by developing products that meet changing consumer needs.

     

    Product Quality Control

    We have a quality assurance process in place which ensures all products are checked by our manufacturer before delivery to our DC. We conduct further checks before products are sent to customers. Our manufacturer underwrites the 25 year guarantee offered to customers.

     

    Key staff members leave

    As a small company, the departure of a senior member of our staff could impact our ability to execute our strategy as planned. We manage this risk by making Natural Paint Co an attractive place to work, by adding incentive schemes that may include Employee Share Options, and having favourable notice periods in the contracts of key employees. We maintain a values-led culture, market level remuneration, and a strong connection to the community. We have an appealing brand and growth story and are confident we can recruit top-tier personnel as needed.

     

    Working Capital Shortages

    Working Capital is an ongoing challenge that needs to be managed carefully. This capital raise should provide sufficient cash to execute growth initiatives without creating undue additional pressure on working capital.

     

    Failure to execute on strategy

    We actively seek input and counsel from external advisors and employ high-calibre external agencies to help us execute our plans. We plan to expand our governance capabilities following the completion of this capital raise and will introduce more formalised company reporting to track and guide performance and decision making.

     

    Economic downturn

    We have a nimble cost structure to allow us flexibility in the event of an economic slow-down. Our D2C e-commerce model limits fixed overheads, while strong brand loyalty and product quality insulate us further.

     

     

    So are you with us?

    Natural Paint Co products are perfectly positioned to be at the forefront of changing consumer trends on an international level. Natural Paint Co. is seeking up to $2M to drive our key growth strategies over the next 3 years. Join our mission and help us to write a new chapter for the paint industry – one that makes a positive impact on both people & our planet.

     

    Read the full Information Memorandum here

     

    Note from PledgeMe

    We have completed Equifax checks on Natural Coatings Group Limited and their Directors, as well as Google and Insolvency checks. There were no adverse findings.

     

    Wow - what an incredible first 24 hours!

    05/07/2024 at 11:48 AM

    We've had an exciting 24 hours at Natural Paint Co HQ. Our capital raise went live at 9.59am yesterday and within the first 4 minutes we had $226,000 pledged! We smashed our minimum target of $300,000 in under 30 mins 🙌

    We are completely blown away by YOUR support! We cannot thank those who have already pledged enough! It is with your support that companies like ours have the opportunity to create significant positive change.

    The campaign has been open for 24 hours and we are sitting just below half a million pledged. Our upper target is $2M. If you would like to join our mission, but haven’t yet, now’s your chance. We don't want you to miss out!

    A reminder that we have $6m of expressed investment interest and with 25% of our target reached already, we are on our way to hitting our maximum!

    Some feedback from our Paint Pledger cheerleaders! (Cue the happy tears)

    "Great to support a New Zealand company, good for the environment, people's health, and my investment portfolio!"

    “I absolutely love the Natural Paint Company. So proud and excited to be able to invest in the growth of your business!"

    “Investing for a sustainable company like Natural Paint Co is what I live for. Their paints are actually amazing too and also it’s kiwi owned!"

    “Currently redecorating my bedroom pregnant and not worried at all about breathing in chemicals thanks to my paints from Natural Paint Co!”

    Your early investment helps to drive the success of the overall raise and therefore the success of your shares! It shows that people believe in the vision of Natural Paint Co.  Let's crack our maximum goal!

    Thank you for your incredible support so far to help change the dirty paint industry for good! We are so excited for these next few weeks and beyond.

    Grace, James & the NPC Crew

      Offer Details

      Current Valuation 7,126,270
      Raise Minimum 300,000
      Raise Maximum 2,000,000
      Share Price 5.00
      Minimum Pledge 500.00
      Maximum Shares Offered 400,000
      Explanation of valuation:

      Our pre-money valuation of $7,126,270 has been completed by our board and advisors. This valuation is based off year 1 forecasted revenue at a 4x multiple and then a further discount of approx. 10% applied.

      Company Details

      Company Name: Natural Coatings Group Limited

      Company Number: 8177513

      Company Documents

      Business Plan

      (application/pdf, 10.7 MB, uploaded 03 July 2024)

      Natural_Coatings_Group_LTD_-_Shareholder_Agreement___Amendment_(previously_NPC_Holdings_Ltd).pdf

      (application/pdf, 766 KB, uploaded 02 July 2024)

      Nominee_Deed_Poll_Natural_Coatings_Group_1_.pdf

      (application/pdf, 248 KB, uploaded 02 July 2024)

      Natural_Paint_Co_-_Company_Extract_(wholly_owned_subsidiary).pdf

      (application/pdf, 744 KB, uploaded 02 July 2024)

      Natural_Coatings_Group_-_Company_Extract.pdf

      (application/pdf, 745 KB, uploaded 02 July 2024)

      Natural_Coatings_Group_-_Certificate_of_Incorporation.pdf

      (application/pdf, 588 KB, uploaded 02 July 2024)

      Natural_Coatings_Group_Ltd_-_Constitution.pdf

      (application/pdf, 587 KB, uploaded 02 July 2024)

      Director Details

      Name Role Profile URL Invested?
      Grace Glass Director/Co-Founder https://www.linkedin.com/in/grace-glass-4a595918b/
      James Mount Director/Co-Founder https://www.linkedin.com/in/james-mount-380242102/

      Ask a Question (You must login to ask a question)


      Is it standard practices for companies to include GST in there revenue figures. In multiple place you quote $1M+ revenue - including in the investor highlights. However in the actual financials a figure of closer to $900k is used. By including GST in these headline results are you not misleading 'investors'?

      Posted on 15-07-2024 by Adrian Edge

      Hi Adrian

      The information in our IM has been put together with input and support from our board, mentors and advisors and we feel confident that the information in it is accurate and reflects the business and the financials clearly. We are transparent throughout the IM where we have taken total revenue (inc GST) and it is standard for the P&L to state numbers as ex GST. 

      If you have more detailed questions, I would welcome you to call us or email [email protected] where we can answer further questions in a longer form dialogue.

      Many thanks
      James

      Answered on 15-07-2024 by James Mount


      Kia ora NPC team,
      we have in our mind positioned ourselves in investing in positive impact NZ starting up companies.
      We nearly committed until we found a paragraph stating that the Company will be positioned to ideally eventually be sold to a big player. Dang.
      Why would you put all the effort in to create a great brand and product to sell to the devil.
      Certainly not what we want to invest in.
      So just curious what drives this statement? It has robbed us of our enthusiasm to invest in what we thought “good new NZ Company doing good things.
      Interested in your comments/thoughts.
      Ellen

      Posted on 14-07-2024 by Ellen

      Hi team, your valuation is based on a 4x muliplier of forecast revenue. This equates to a forecast revenue toward $2Million. That is nearly double your current revenue. Is this actually likely? Given you are $6M short of your 23 forecasts provided during your Snowball Effect raise.

      Posted on 08-07-2024 by Adrian Edge

      Hi Adrian

      We feel confident in our financial projections and have included both a bronze (conservative growth model) and a gold model (which is our stretch model or “best case” scenario). These projections have a robust 3 year working financial model underpinning them created by our board with the support of a chartered accountant. You can find these models and revenue assumptions information on pages 43 - 45 in our IM.

      The revenue number you are referring to was from the equivalent of our “best case” scenario model 3+ years ago. Many of the growth strategies planned from our previous raise were unable to be realised in full due to the impacts of covid (commercial growth and exporting) which were large contributors to the previous revenue assumptions. However, you will see we have still achieved strong growth since FY21 which you can find on our financials page (page 42).

      Our bronze model includes revenue in the commercial space of $750k in NZ and $150k in AU, which is based on closing approx 20-30 clients at an average monthly spend of $5k. We believe this is a conservative estimate of what our team could achieve in market, especially given it is less than 0.2% of the total commercial market and we already have strong demand from specifiers ready to work with us once we have colour fan decks (which is one of our main bottlenecks for growth currently). The model also accounts for 4-5% month on month growth in the ecommerce space, supported with a soft launch into AU.

      Natural Paint Co has matured considerably over the last 3 years. We believe we are well set up for success with a clear and focused strategy and 3 more years in the market, learning from our many wins as well as from our challenges. These learnings are invaluable to take us forward on our growth journey.

      We also have a much more experienced founding team and are supported with a stronger advisory board and a market more primed than ever for our product offering.

      We recommend judging the investment opportunity on its merits as it is currently and not what the business was 3 years ago.

      Thank you for your question and support!
      James

      Answered on 09-07-2024 by James Mount


      Hi team. Since the company holds no patents, what's to stop any of the incumbent paint manufacturers from creating similar or even better paint formulations than yours?

      Posted on 06-07-2024 by Cristian

      Hi Cristian

      We address this question and why we believe we have a strong competitive advantage against the bigger chemical incumbent on pages 47 and 48 in our IM. Page 48 specifically talks about our competitive moat and the barriers to entry for an existing competitor to enter our space.

      On the topic of patents, these are not common for the paint industry for product formulations. Primarily as the cost/benefit is not there for us at this time. We hold IP in our product formulations that is unique to us (discussed on page 27 of IM). However, product formulations are adapted and enhanced as new materials/ technology is developed in the industry to ensure we are at the front of the competition with our innovation so a patent on paint can limit the agility required to constantly innovate and upgrade products as technology advances.

      We may look to secure patents in the future for new innovation (primarily thinking of deep tech) where the technology may wish to be licensed internationally.

      Many thanks for your question!

      Answered on 09-07-2024 by James Mount


      Hi there, sorry if I have missed this info somewhere, but can you tell me if you (or someone else on your behalf) does animal testing?

      Posted on 05-07-2024 by Natasha

      Hi Natasha

      Thank you for your question! We 100% do not test on animals nor does anyone on our behalf. We are also B-corp certified, which involves upholding rigorous ethical standards for both ourselves and screening our suppliers.

      Many thanks!
      James

      Answered on 06-07-2024 by James Mount

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