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Magic Innovations

Innovative event solutions - creative, content, soft, equip

Ukraine, Kyiv city
Market: Culture, art, Entertainment, Services, Another, Virtual and Augmented Reality
Stage of the project: Operating business

Date of last change: 19.04.2019
Min investment
$  280.000
Total required
$ 280.000
Rating
equalizer 305 из 1000
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Idea

Design and produce innovative media event solutions for private and business events, with a full pipeline, which includes everything that supports implementation of the solution idea: creative and design tasks, production of 2D and 3D content, production of decorations, software development, projection and any other equipment rental services.

Current Status

Company is more than 10 years on the market
3 offices – Kyiv, Moscow, Dubai
Portfolio – 800 projects, approximately 100 projects per year
Experience running projects in foreign countries (more than 20 countries)
70% of projects done are on local Ukrainian market
4 main areas of services – content, projection equipment rental, production of specialized constructions and projection surfaces, development of specialized software
Main office in Kyiv, Ukraine
Team – 40 employees
Team consists of project managers, 2D/3D artists, video engineers and technical specialists, capable of handling projects of any complexity.

Market

3D Technology Market was valued at $46.0 billion, and is expected to reach $175.1 billion by 2020, supported by a CAGR of 21%.
3D movies collected 30% of total box office revenue. The increasing demand of 3D movies is major driving force to adopt 3D technology in entertainment industry.
Government is taking initiative to invest in future technology to create in-house manufacturing job opportunities.
3D visual effects share 17% of the market share and is expected to grow at CAGR of 20.2% during 2013-2020.
The global 3D animation market size was valued at USD 11.46 billion in 2016. The increasing adoption of visual effects by the media and entertainment industry; growing use of animation in media & entertainment, manufacturing, construction, and other end-use industries; and increasing competitiveness in the virtual reality, augmented reality, and artificial intelligence spaces, are expected to drive the market growth significantly.



Problem or Opportunity

Problem:
Standard solutions in the event, entertainment and advertisement industries do not have the desired effect. New generation of clients consume information in new ways – they want interactivity, involvement, immersion, augmented realities, new interesting combinations of above.
Advertisement, marketing agencies and brands are in constant search of bold, innovative solutions.

Solution:
We create multimedia solutions for a more visual information delivery, bold, innovative, technologically advanced approaches for entertainment and advertisement industries, drawing consumer attention to a certain brand or an event. These solution give an ability to stand out on a highly competitive market, get an advantage, increase brand recognition, word of mouth effect, WOW-effect.

Solution (product or service)

We provide clients with multimedia, interactive, projection solution for events or any other marketing objectives of any complexity, such solutions include: 3D content creation, 3D mapping, Holograms, Interactive installations, VR/AR, Multimedia installations, Software development, 360 panoramic and dome projections, Laser and light show, Design and production of custom projection surfaces.

Competitors

Sila Sveta
Paint Scarping
Light Harvest
The Projiction studio
EyE Q Prodactions
RabCup
GO2
PixelRain

Advantages or differentiators

1. Thanks to our diversified experience, we have more than 500 distinctly different successful projects (more than 150 in our Portfolio) – it’s a lot more than our competitors.
2. You wouldn’t find two identical projects, we develop solution individually for each objective, sel ect and mix together the most appropriate technologies for the task in question, taking note on all the technical restrictions of the location and develop content on basis of the information collected.
3. We’re not simply creating awesome 3D content, we’re about the full cycle – fr om creative idea and technology selection, all the way to full technical support of the project.
4. We don’t organize standard event, we create a sensation inside an event, a bright memorable accent.
5. We’re flexible – we take on the tightest deadlines, thanks to our professional team and streamlined processes.

Finance

Projects per year – 100
Average project check – 20000 USD
Revenue per year – 2000000 USD
Direct project costs – 900000 USD
Employee salaries – 200000 USD
Office maintenance – 140000 USD
Purchase of equipment – 150000 USD
Marketing – 50000 USD
Net profit – 560000 USD
Investment in current projects – 350000 USD

Business model

Business model: B2B (Business to business) / B2P (Business to person)/B2G
Promotion tools: internet marketing, social network promotions, image/other projects (festivals, competitions, exhibitions, forums); own image and social projects (interactive quest for children, CG artist school, dance show).
Pricing: complex product, no product catalogue with prices available – cost of every project depends on a wide variety of factors. Average content production price is available (from 50-150 USD for 1 second of 3D content). Equipment rental prices and cost of technical staff services are available. Cost of structure, decoration production as well as assembly and logistics are calculated individually every time.
Average project bill: varies based on the region. Ukraine – 7000 – 10000 USD, foreign projects – 15000 – 20000 USD.
From 3 to 10 project are being done per month (of varying complexity).
Sales channels: website (hosts the portfolio), social networks (youtube, facebook, Instagram, linkedin), through project managers (5 employees, they receive 10% of project net profit) or through agents.
To a significant portion of the clients we are recommended by third parties (approximately 10%) or they are a returning customer (approximately 15%).

Processes:
1. The sale: request (from website, partner, agent or returning client) gets transferred to the main office via email or messenger to the operation director or office coordinator. Potential project gets distributed and fixed among project managers (we have 5 at the moment) for further development. Currently Bitrix24 CRM system is being implemented to support this process.
Corresponding project managers sends brief template to potential client, this document contains common questions to help us analyze the project. Project managers together with head of studio and technical director evaluate the project, approve it with the client. After approving costs, deadlines and the scope of work, client signs the contract and we receive prepayment (usually 50% of the total project cost).

2. Project implementation: project manager is fully responsible for the project. PM form project work group, which consists of artist-superviser, concept artists, 2D/3D artists, technical professionals, video engineers, decoration professionals. A list of constant contractors is also available for additional tech solutions, etc. Timeline gets created and task being split. Telegram project group-chat and a cloud storage directory get setup, regular status meetings get scheduled. PM keeps in touch with the client all the way, transfers all requests and edits to the work group.
3. Creative process: usually creative ideas for projects get generated via brainstorms under supervision of creative director, head of studio, decoration production director, technical professionals and project manager.
4. Content production: responsible – head of studio, keeps track of the overall artist workload on all projects in production.
5. Participation on site on the project day itself – by previous agreement. Content delivery – by cloud storage link or physical drive, depending on the size of the content.
6. Closing the project: all parts of the project get archived, post-payment received, all accounting questions closed, payments roll out to contractors, agents and work group.
In case we need to scale production, additional designers and concept artists are involved on freelance basis.

Money will be spent on

In one year we need to open US sales-office, research the market, find and connect with required partners and contractors, run our first sales. We plan to do 5 commercial and 5 company-image projects in the first year. We are looking to raise 250-280 000 USD in investments with a payback of 4 years.
It is necessary to establish contacts, explore regional peculiarities of doing business, establish contact with the required contractors, find employees (representatives), hold many meetings

Offer for investor

15% of net profit
Projects per year: 2019 –1, 2020 – 20, 2021 – 30 , 2022 – 40
Average project check: growth from 50000 to 200000 USD
Revenue per year: 2019 – 50000 USD, 2020 – 2000000 USD, 2021 – 4500000 USD, 2022 – 8000000 USD
Direct project costs – 65%
Revenue per year minus direct costs: 2019 – 32500 USD, 2020 –1300000 USD, 2021 – 2925000 USD, 2022 – 5200000 USD
Expenses for opening a US sales office and expanding headquarters: 2019 – 335000 USD, 2020 and beyond – 350000 USD
Profit: 2019 – -282500 USD (minus), 2020 – 1020000 USD, 2021 – 2645000 USD, 2022 – 4920000 USD
Investor's profit 15%: 2020 – 153000 USD, 2021 – 396750 USD, 2022 –738000 USD
Return on investment: 2020 – 140000 USD (50%), 2021 – 140000 USD (50%)

Risks

1. There is a question of trust – clients don’t know us, we’re a new player in the US market. It is necessary to focus on company-image projects to increase awareness.
2. We’re not aware of differences we might face of doing business in the US and its various states.

Incubation/Acceleration programs accomplishment

StartUp Battle (Kyiv, March 2019)

Won the competition and other awards

BERLIN FESTIVAL OF LIGHTS AWARD 2016 – 1st place
EVENTАРИЗАЦИЯ – BEST EVENT FOR BRAND - 1st place
FESTIVAL OF LIGHTS - Final work of the festival
ADDED TO THE BOOK OF National Ukrainian RECORDS FOR 3D MAPPING
CERTIFICATE OF APPRECIATION - Burj Khalifa
VISUAL ARTIST AWARDS BEST 360 STILL IMAGE – 2ND PLACE
ONE MINUTE PROJECT MAPPING COMPETITION - Finalist of the festival
BIGGEST 3D MAPPING CAKE - National Record in Ukraine
Winner of DSE APEX Award 2019 - 3 nominations - the Grand Prix content of the year, 1st place and 2nd place


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Idea
Current Status
Market
Problem or Opportunity
Solution (product or service)
Competitors
Advantages or differentiators
Finance
Invested in previous rounds, $
Business model
Money will be spent on
Offer for investor
Team or Management
Mentors & Advisors
Lead investor
Risks
Incubation/Acceleration programs accomplishment
Won the competition and other awards
Invention/Patent
Photos
Product Video
Website address