For Kokoon backers hoping to have a Christmas present to help them sleep, insomnia in to the New Year and beyond is looming.
Kokoon raised £1.7m on Crowdcube just around 3 month ago. We warned investors at the time that their Kickstarter Campaign had gone sour with broken promises and product delays. It seemed to us that the company was using the Cube to cover the costs of production for the KS backers.
In the Crowdcube campaign the CEO of Kokoon told one potential investor a total lie - no other way of putting it. He asked the company why there had been so many delays over 2 years since the KS completed.
The CEO as part of his answer made this statement -
These changes have taken time, but the end result is an innovative, robust headphone that has been tested and is ready for mass manufacture and with a high level of demand attached to it.
That was 3 months ago. 2 days ago the same CEO in an update to KS backers, stated that of various pre test testings(pre-scan compliance testing he calls them ie tests to make sure the product will get through the real tests), the product had just failed 2 safety tests and that this would mean changes, retesting and more delays. It also went on to state that production testing was not yet ready to be tested and that product testing via backers had not started tests yet. All a load of testcycles we cried. Certainly nowhere close to mass production or final testing - something he must have known when answering the Q on Crowdcube.
You get where this is going. We have been down this track before.
This may well be a fantastic product in the end, but the end is not insight and we have now had at least 20 false horizons. KS backers spent over £1.2m in pre sales (optimistically filed as debtors by the company) and now Crowdcube investors have shovelled in another £1.7m on the back of trusting that what the CEO says.
Give him some slack for over enthusiasm, naivety and a severe case of marketing rash but surely he his duty bound not to mislead. We reckon it will be at least 3 months before any mass production is ready and we wouldnt expect to see KS backers with their hard won prize until the start of the Spring 2018 at the earliest. Maybe he should tell them that. Those backers that is, that have not joined the small but growing number, demanding a refund. Refinancing may well be required because to the lack of planning and consequent delays. Promised store orders from the UK's leading outlets may be put at risk.
Bet Crowdcube investors were not expecting that.