FastForward makes biggest investment to date in Factom

FastForward Innovations has executed a ‘simple agreement for future equity (SAFE agreement) with investee company Factom, it said on Monday, under which it has advanced $6m to Factom, which would be converted at a future date at a 25% discount to the price of Factom's proposed Series B fundraising.

The AIM-traded firm said that, in addition to the initial SAFE advance, it had the right to invest up to an additional $9m, on the same terms, before 30 September.

It said the initial SAFE advance was being funded from existing cash resources, as well as part of the funding available to FastForward following a $0.8m loan by chief executive officer Lorne Abony.

The loan from Abony was a 12 month unsecured term loan at an annual interest rate of 7%, and would be repayable on the earlier of 20 July 2019 or the date the company completes a debt or equity fundraising realising gross proceeds of more than $1m.

FastForward said exercise of the additional investment under the SAFE agreement was dependent on it raising further funds.

The funds invested would, among other things, be used to expand Factom's US engineering team to deliver two critical processes prior to its proposed Series B fundraising.

Those critical processes were the build of the software-as-a-service (SaaS) platform to be “efficient and responsive” to scale customer growth, and the acceleration of the product roadmap to deliver more product features and increased revenues.

In addition, Factom intended to use funds to increase its proprietary patent pool from 14 to more than 20 US patents, build a “stronger” enterprise marketing and sales team, and invest in tooling needed to scale customer operations and minimize back office overhead.

“The $6m invested under the SAFE is FastForward's biggest investment to date, and in addition, we have the right to increase the size of our investment on the same terms by 30 September,” said Lorne Abony.

“We have been negotiating terms with Factom as an early investor in its proposed Series B fundraising for the last six months and we believe the SAFE structure - common in the US - gives FastForward real upside on the successful close of the Series B round, as well as protecting Factom and giving it the best possible chance to raise its Series B round at the highest price it can achieve.

“The SAFE Agreement positions FastForward as an early investor in the round - not the lead investor and ultimately, the lead investor will set the price.”