The U.K. government is set to invest £170,000 into a company that runs adult parties for the rich and famous around the world.
Founded in 2005 by Emma Sayle, Killing Kittens hosts exclusive events in cities like London, Manchester and Los Angeles. The Guardian referred to it as "a members-only sex club" and Business Insider called it a "sex party company."Â
"Our world-famous parties are designed to encourage, liberate, build confidence and allow experimentation all within a safe environment led by our Kittens," the company writes on its website. "Burlesque performances, ornate townhouses, countryside mansions. We guarantee it's like nothing you've ever experienced before."
Killing Kittens launched a crowdfunding campaign on the Seedrs platform in May to help it transition from being an events-based company to a "sex tech" company that runs some events. The campaign raised £170,000 from Seedrs investors, which the government is planning to match through its Future Fund scheme, bringing total investment to £340,000.
Killing Kittens launched its online "social network for sexual exploration" in 2017 and the web app is due to get an overhaul on Monday. In addition to the web app, there are two mobile chat apps in the pipeline too. The company hopes these digital offerings will bring in ad revenue and it is currently in the process of developing a third-party ads platform.Â
"We are still awaiting funds but the Future Fund conditionally approved our application today," Sayle told CNBC via email on Tuesday.
A spokesperson for Killing Kittens said the funds should be with the company in the next two weeks.
The company said 45% of the new funding will go towards product innovation, 45% will go to growth marketing, 5% will go to operations, and 5% will go to preparing a funding campaign.Â
The U.K. taxpayer will hold a 1.47% equity stake in Killing Kittens if the company does not repay the loan and the Future Fund investment converts to equity. The company is currently valued at £11.5 million.
It describes itself as a female empowerment brand, and makes money by charging its 140,000 social network users for tickets to its events. It had a turnover of £1 million for the year to April 2018.
Describing the parties in a previous interview, Sayle said "anything goes," adding that "they tend to turn into orgies." She added "there's a lot of girls on girls" and "big group" things. There are also some people that just "come and watch," she said.
The parties are designed to be "female friendly" and there are rules in place to protect women.
The Future Fund has been developed by the U.K. government and is being delivered by the British Business Bank. Unveiled by U.K. Finance Minister Rishi Sunak in April, it's designed to help "innovative" companies survive the coronavirus pandemic. While Killing Kittens is best known for its sex parties, the company has plans to launch a new website on Monday and a new app in the coming weeks.Â
"The Future Fund is open to a broad range of match investors across the U.K. where investment decisions are made by independent fund managers and other eligible investors, including crowdfund platforms, on a commercial basis," a spokesperson for the British Business Bank told CNBC.
"The Future Fund uses an online platform based on a recognized financial instrument, and a set of standard terms with published eligibility criteria," they added.
This isn't the first time Killing Kittens has raised money on Seedrs. In 2018, it raised £580,000 on the platform and in 2019 it raised a further £480,000. Those rounds did not involve taxpayer money.
Seedrs said it was proud to be supporting the latest Killing Kittens crowdfunding campaign.
"Seedrs has no interest in passing moral judgment on a business that is about consensual activity between adults," a spokesperson said.
"We conduct extensive disclosure and legal due diligence on all of our companies, but it is up to our investors as to what they want to invest in. In the case of Killing Kittens, many of our investors, and many of the company's own customers, have judged it to be a compelling investment opportunity."
The Treasury told CNBC that Future Fund applications are being handled by the British Business Bank and that it has no insight into which companies are being backed.Â
Correction: This article has been updated to clarify what Killing Kittens will spend the investment on. Also, that the U.K. taxpayer will only hold a 1.47% equity stake in Killing Kittens if the company does not repay the Future Fund loan. An earlier version of the article mischaracterized these points.