Friday, 23 March 2018
Seedrs' Vrumi struggles to make sense
We always thought Vrumi was one of those business ideas that was only there because of the internet - it didnt have a real, grounded need. And so it has proved.
Vrumi raised just shy of £1m on Seedrs in 2015. In 2016 and 2017 combined, it managed revenue of £226k. In turn over that period it lost £1m. So in the space of 24 months it had soaked up £2m and produced £226k in revenues.
So either the money was going into areas of no real benefit to the company or the people in charge of those areas were doing a poor job. It's not a good ratio when you consider that now they are thinking of closing down and that money appears to have had zero chance of creating a business.
When will entrepreneurs who think they know the internet, understand that promoting online business like this, takes very deep pockets. The company never had so much as a side pocket.
In the end, few people wanted this service - the numbers prove that. Or if they did, Vrumi have a done an exceptional job of putting them off.
Shareholders would love to know what percentage of the £2m went on actual promotions.
A final point here. This company and Seedrs kept shareholders well informed - unlike Crowdcube. However if the information passed to shareholders is to have any benefit it does need to be more robust. It is no good saying things are fine and then closing down a year later.