Just Park raised £3.5m on Crowdcube on a business model that has now been shown to be a little fluffy.
The Crowdcube plans showed the company making losses in 2015 but only £400k not the £1.7m just filed.
We said at the time that the main flaw with their car park sharing model was that the people projected to make all the money were not the owners of the spaces but Just Park. This has proven to be spot on. There are numerous examples for the past year of people booking a space and arriving only to find that the space is taken and there is no way at such short notice to sort out the problem. Some people end up with £100 parking fines as a result. Customer service appears to be poor. Looking at Trust Pilot reviews, we are struck by the complete contrast between the 5 start reviews and the 1 star reviews - not much in between. A bit like Marmite.
When we questioned JP on this flaw they just said na - it's not a problem. We now have £1.3m of extra losses to prove it. They may yet get to grips with it but we doubt they will be able to scale to a level that will see any CC investors getting returns. Their main hope now must be that JP don,t fold just yet. There has been more money raised and will no doubt be more in the future - all diluting the CC shareholders. 4 of the Directors left in 2015.
GrubKlub
Yet another internet business that only makes losses, Grubclub or Klub, showed exceptional growth in their Crowdcube pitch when they raised £288k in January 2015. They used the unlikely metric of GMV to big up their sales pitch or show traction as they put it. GMV for those not in the know is the total sales value for a company that is say commission only based and gives a highly misleading image of a company's size. So for example the GMV for Grubklub in 2014 was a projected £400k (which at the time of the pitch was in reality an historic figure). The real sales value as reported in the filed accounts at CH for this was £34,994. Now the 2015 accounts are also filed and show a net revenue of £34,189. In the Crowdcube pitch this 2015 figure was given as £157k on a GMV of £1.7m. From the figures it looks like the real GMV was around £400,000 - so zero growth.
We emailed Grubclub and were told that our numbers were all wrong; although when asked they failed to provide the numbers that were correct. Either the filed accounts are wrong in which case this is for HMRC to look into, or they are way off target.
Angel Berry
Raised £190k in 2014 on Crowdcube. Despite the fantastic projections that Crowdcube allowed them to use to sell the equity - Angel Berry have made actual real losses of over £340k to date - breaking most records in 2015 by filing losses of £150k against Crowdcube projections showing EBITDA of £612k. That's worth a gold medal surely.
GrubKlub
Yet another internet business that only makes losses, Grubclub or Klub, showed exceptional growth in their Crowdcube pitch when they raised £288k in January 2015. They used the unlikely metric of GMV to big up their sales pitch or show traction as they put it. GMV for those not in the know is the total sales value for a company that is say commission only based and gives a highly misleading image of a company's size. So for example the GMV for Grubklub in 2014 was a projected £400k (which at the time of the pitch was in reality an historic figure). The real sales value as reported in the filed accounts at CH for this was £34,994. Now the 2015 accounts are also filed and show a net revenue of £34,189. In the Crowdcube pitch this 2015 figure was given as £157k on a GMV of £1.7m. From the figures it looks like the real GMV was around £400,000 - so zero growth.
We emailed Grubclub and were told that our numbers were all wrong; although when asked they failed to provide the numbers that were correct. Either the filed accounts are wrong in which case this is for HMRC to look into, or they are way off target.
Angel Berry
Raised £190k in 2014 on Crowdcube. Despite the fantastic projections that Crowdcube allowed them to use to sell the equity - Angel Berry have made actual real losses of over £340k to date - breaking most records in 2015 by filing losses of £150k against Crowdcube projections showing EBITDA of £612k. That's worth a gold medal surely.
Looks like the revered Brett Jamie Akker has been terminated from the Directorship of Lovespace. https://beta.companieshouse.gov.uk/company/07694327/filing-history Not seen much on the Blog about Lovespace. Would love to see more - accounts are overdue so I'm predicting another substantial loss. Ratings are dropping too.
ReplyDeleteMum? Is that you? Only person who could possibly describe me as 'revered'...
DeleteI'm afraid there is no conspiracy theory here. As you may also have noticed on Companies House, I also resigned as a Director from another business, Osper, at a similar time. I have the utmost confidence in both these businesses and I will remain involved in both in an advisory capacity. I was on the Board for 5 years and 3.5 years respectively and my decision to step aside was one made for purely personal reasons as I would like to free up a bit of my time to focus on a couple of other projects.
As I say, I will continue to remain involved in both - just not at Board level.
Brett - good of you to respond. I think the revered bit has come from your own description of yourself on Crowdcube. Maybe you have slightly missed the point - its not all about you. Investors were told a convincing story on Crowdcube which had you at centre stage leading this company. Now you have left. You can see that people who invested a total of £1.5m on the fact that the company had such an experienced and successful leader might now feel a little duped?
DeleteThanks - we are watching and waiting for the results - interesting about Akker and a sure sign things are not too good.
ReplyDeleteummm... aren't those losses you point out on Justpark justified? They have taken massive market share and are firming up as the lead player in the sector, isn't that better?
ReplyDeleteWhy don't you ask some questions you'd like answered directed at Justpark's management?
They may be - we will have to wait and see. It is the new mantra - making losses to gain market share - but then if that was the plan, why are the figures they used in their Crowdcube pitch so very different? That is my point - one set of projections for the business - which I agree with you may make sense long term and one set of projections to sell the equity. That is bullshit. But its very common bullshit which a lot of people have slipped on. If the management want to comment on why they have two totally different plans then Id be happy to hear from them.
DeleteJustpark projected losses of 400k and had actual losses of 1.7 million gbp.... Yes you are absolutely right, JustPark need to explain it and yes it is absolute Bull Shit - thanks for pointing it out- love this blog.
DeleteThe fact is (and I do hope you print this for balance) Justpark raised nearly 4 times more than it had expected and so perhaps it's increased losses are relative to that fact. No fan of crowdcube but I think Justpark will pleasantly surprise you.
DeleteWhy would more money in the bank lead to higher losses - you have me there. I sure hope they do surprise me but I wouldnt be betting on it.
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