Wednesday, 4 July 2018

So what really happened to Zapaygo on Crowdcube? We do some dredging.



According to Crowdcube's own records, Zapaygo raised £450k from 231 investors on the platform at the end of 2017. This figure is not reflected in filings at CH. The main feature of this campaign was a signed and sealed deal with the NEC Group - to use the Zapaygo app across their venues. 


In Zapaygo's confirmation statement dated 5 March 2018, the company only has 38 shareholders - none of them are Corwdcube. 

We spoke to one of the NEC venues today, they dont use Zapaygo as they have their own internal system Qbuster. They said that they had no idea when or if Zapaygo would be installed. We received a reply today from the NEC PR department confirming a 10 year 'commercial agreement' with Zapaygo but no mention was made of exclusivity or any time frame. 

The NEC Group PR dept put out this in December 2017 -  http://www.necgroup.co.uk/lifestyle-payment-app-zapaygo-and-the-nec-group-announce-partnership/. It is for a 10 year exclusive deal with Zapaygo. Although there is no detail. It helped persuade Crowdcube investors to back the company. 

We asked Zapaygo for answers a while ago but they have not replied. That is not to say there isnt a contract (see above) but it might have been helpful if the pitch had pointed out the start date or if it had to undergo trials? Maybe the lack of funding has caused the problem - although this would be odd, as the pitch never mentioned it being subject to raising £500k.

This PR from the NEC Group is currently being used by Zapaygo on another funding platform - angelinvestmentnetwork.co.uk  to raise another £1m. This platform is not FCA regulated but unlike nearly every other ECF platform, it does make a profit. The pitch tells investors that Zapaygo has a ten year exclusive contract with the NEC Group. In this pitch Zapaygo claim to have raised £500k at the start of 2018. No filings at CH suggests this has happened, although Crowdcube claim an investment of £450k. Investments have been made but not at this level according to CH filings. If Crowdcube investors had put in £450k and it been completed, then they would appear in the March 2018 filing.

And Crowdcube what on earth are doing? If you manage to get onto their CC page, it appears from the forum that investors have been left in the dark since February and one Q was from 3 weeks ago. It is farcical for an FCA platform to be involved in this - really.

There is this helpful piece from the ever unreliable Crowdfundinsider  - they do love to get it wrong -

https://www.crowdfundinsider.com/2018/01/127261-overfunding-orders-payment-app-zapaygo-investments-surpasses-500000-funding-target-crowdcube/- 

And this page on Crowdcube confirming the success - obtained with a simple Google search. No doubt following this post, this will disappear so here is a screen shot -



The upshot of all this is that the core deal that made this company investible has been delayed or cancelled and obviously, so have its revenues. 

We have not seen the 'contract' but it must have been worded in such a way as to allow for wriggle room. Either that or the app failed to pass initial NEC testing. Either way it looks as though investors were not told the entire truth when the Crowdcube pitch declared the NEC deal was signed, sealed and delivered.  

We had an email exchange in December 2017 with Zapaygo's CEO. He was annoyed we had flagged up some things in the Crowdcube pitch. Well as ever, it looks as though we were right again. Certainly Zapaygo is not at the NEC and is not due there anytime soon according to the person in the finance department. That is 7 months after Zapaygo and Crowdcube claimed in a pitch seeking investment for equity, that it was a done deal. How misleading is that, readers from the FCA?

Of course it is entirely possible that the mess has been caused by Crowdcube's inefficiency. What's the betting on that scenario? Either way is makes ECF look like a poorly run kindagarten - again. 

1 comment:

  1. Compare and contrast with an app like SwipeStation who have just been raising on Seedrs (disclaimer - I've put a bit in as I thought it was a very clever idea) who go out of their way to give details about their case study locations and partner venues.

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