Crowdfunder, a UK based version of Kickstarter, largely for creatives, has raised almost £2m on Crowdcube in two tranches. Now Crowdcube are loaning them money.
In what is a bizarre development, Crowdcube have signed a loan agreement with Crowdfunder - amount unknown. Darren Westlake, one of the founders of Crowdcube is a director of Crowdfunder.
This loan was not in the financials when they raised £1.3m just over 12 months ago. So it wasnt planned. Accounts are due out in June. Accumulated losses filed so far amount to £610k.
Crowdcube, despite what their PR says, are not generating net cash. At their average commission rate of 5%, they need to be raising around £160m each year just to pay their current costs of £8m pa. They are currently nowhere near to this with a disastrous April. If they break £100m we would be surprised.
So what's the deal?
We have no idea. Crowdfunders' world is so separate to Crowdcube's we can see no synergy. Crowdfunders platform is currently plagued with SNP MPs trying to raise election funds. Hardly what Crowdcube investors are likely to be keen on and not exactly creative. Crowdfunders was due to have ample cash at this stage according to the Crowdcube projections and that was on raising only £1m 14 months ago. Seemingly, that projection was wrong.
Any clues let us know.
This is so strange! Maybe they are turning to loan sharking to fill the gaping hole in their revenue projections... haha
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