Tuesday, 6 November 2018

Emoov, sadly going where no investor has been before....................for good reason.


Emoov may well turn out to be the end of Crowdcube. The company raised £2.6m in 2015 on the platform. It then merged with two other loss making online estate agents this year and on the back of a promised IPO, was allowed to raise another £1.8m on Crowdcube just 2 months ago. Now it is toast - albeit toast that is for sale. So what is it worth? Certainly not the £100m Crowdcube investors paid 60 days ago. 


We warned you all.......again. We knew about this a while ago but didnt want to prejudice the sale process by writing it up. Now it's hit the headlines. We had a sad email from an investor who says he has lost a large sum of money and that that is the end of equity crowdfunding for him. Well done Crowdcube.

The latest Emoov Crowdcube pitch has been 'taken down' by the platform to save some of their blushes but we wrote about their merger and the new campaign here. What investors were being told about the state of the company does not now appear to be quite true - ring any bells?

The captain of this ship is now saying that the cash runway has ended - that's 2 months after raising over 150% of the cash they asked for on Crowdcube. Yet another one for the good book - Russell Quirk (no typo) for the record. Quirk is reported by the FT to have said that the business ran very well for the last 8 years. That's the same business that has collected losses of over £10m. Yup that is some success story and we have not even seen last year's accounts yet. 

He can be seen here at end of the recent Crowdcube raise thanking people for all their cash - sends shivers..................



In a piece in the FT  - here, the same Quirk is now saying all this cash has run out. I would be surprised if anyone could find a more glaring example of gross mismanagement of anything, anywhere in this whole bally world.

Reports say that Northern and Shell, a major backer according to Emoov, failed to come through with the funds - leaving Crowdcube investors as the only source of new money after the merger. Who would have guessed that?

This is what Luke Lang had to say about the second Emoov Crowdcube raise -

We’re delighted to welcome our good friends at Emoov back to Crowdcube’s platform for this next raise, as the company continues to innovate rapidly in the property space. Emoov made a highly successful raise on Crowdcube in 2015, providing £2.62m of growth capital to help fund expansion.
Emoov’s crowdfunding success is a great example of how Crowdcube helps growth companies find capital to take advantage of market opportunities and build their brand while allowing investors who believe in the company to take part in that growth by investing as little as £10.
Luke Lang
Co-founder, Crowdcube

This is exactly why Crowdcube needs to lose its FCA licence. The evidence is there for the FCA, who do not need to go anywhere where man has not been before - they just need to wake up. 

Beam me up Scotty. 

10 comments:

  1. The crowd raise should have been contingent upon the £15m from Northern and Shell. The deal should have been structured as such.

    This is wild.

    ReplyDelete
  2. "Reports say that Northern and Shell, a major backer according to Emoov, failed to come through with the funds - leaving Crowdcube investors as the only source of new money after the merger. Who would have guessed that?"

    It may be of interest that Northern and Shell have recently acquired (or are in the process of) a stake in the cheeky panda investing not cash but "£1M of media spend" if this was the same for Emoov then the investment would of never helped cover any overheads but only marketing costs.

    NB The Cheeky Panda, seems to be a very well run company.

    ReplyDelete
    Replies
    1. Ah yes the Cheeky Panda - jury out on that one. Seedrs valued it £4.6m pre money last year. Long way to go yet. My understanding from reports in the media is that N&S were funding Emoov but it fell through. They probably did some proper due diligence. There was talk of a media deal as well.

      Delete
  3. The valuation was halved after closing the raise: "Specifically the previous valuation of the company was £104,000,000 and we are now setting the valuation for this investment at £51,800,000"
    There is still some headroom to sell the company at a number that could minimise the CC investor's loss.

    ReplyDelete
  4. Surely no one's going to pay anywhere near £50M. I feel so sorry for the investors. I hope they went in with their eyes open.

    ReplyDelete
    Replies
    1. If the result is a material loss for CC investors this may be the beginning of the end of CC as Rob points out. The FCA will have to act and close this outfit down.

      Delete
    2. This is what Captain Quirk had to say at the time - 'In contrast to our last campaign, we already have the foundations in place to put our sights on an IPO. However, we wanted to offer one last opportunity for non-institutional investors to support the enlarged company, and to benefit from the anticipated uplift in value that our continued success is likely to deliver." See www.insidermedia.com/insider/national/emoov-back-on-crowdcube

      Delete
    3. And this is well worth a glance for the comments- well done guys you proved to be spot on. When will Crowdcube take some responsibility for this? www.propertyindustryeye.com/emoov-to-close-crowdfunding-campaign-early-after-nearly-800-investors-chip-in/

      Delete
    4. Yes i noticed that. The industry insiders saw straight through it.

      Delete