Tuesday, 26 January 2016
What exactly is a 'transacted customer'?
This one made us laugh out loud.
George Spencer founded Rentify in 2012 and now they have launched a campaign to raise £1m as part of a 2016 £6m funding round. The stated aim is to make the business 'huge'.
George has lots of very important friends and despite the lack of traction so far, some big names are involved.
I just wonder what George means by his opening salvo - ' ....the business has gown to more than 200,000 transacted customers.......' Transacted is not a real word, so what can he be saying?
Maybe Rentify has completed 200,000 invoices since 2012?
Maybe his customers are into some transcendental, cruci-fictional, mind expanding, after lights out games?
Perhaps you deal with mainly HMOs and you count the 200,000 residents as your clients?
You can just see the Crowdcube meeting though -
George - 'We want to say something at the start of the pitch which makes us look big, you know something really impressive.''
Crowdcube - 'Well your accounts will not do that George, so why don't we add up all the customers you have ever had, invent a collective noun to give them and use that? How about 200,000 transacted customers? That sounds pretty huge to us.'
And there we have it, Crowdcube have added to our rich and diverse etymology.
The problem is George, you seem to think this is a game where all the players are either stupid or mad.
The implication is that you have 200,000 customers, which would be very impressive. However when you compare 200,000 customers with a revenue of 310k for 2015 things start to look a little ropey. Are we expected to believe that the average Rentify customer spends around £1.50? Even if you add up the last 2 years revenue (£462k) and add another £200k for 2012 and 2013, the average Rentify customers annual expenditure for your services is £3.31. What do you provide that costs less than £5? Dont answer that.
It does help to explain the impressive losses that have accrued of £7.35m in 3 years.
Ignoring the multitude of other vague references to terms like 'processed properties' we simply cant make head or tail of this one.
A Rider - since publishing this today the pitch has more half completed albeit that one 'investor' put in £380k. a couple of points to remeber before you jump in - Balderton Capital who back this company are also Crowdcube's maij backers and the £5m extra equity funding that 2016 will see (according to George) will dilute existing shareholders. Although George says its not very significant, in fact it could bev - the deal isnt done yet. We are seeing increasing signs of VCs using ECf to feather their own nests - so just be aware.