Kokoon lowers valuation by 20% at the end of their Seedrs round to 'accomodate' a £525k investment from an EIS fund.

We strongly recommend that if you want to be cheered up, you read the Kokoon Kickstarter forum. Now in breaking news, the company has written via Seedrs to existing SHs about an exciting development. 

Hard to know where to start with Kokoon  - makers of the sleep enabling headphones that have given thousands of Kickstarter backers sleepless nights, waiting for delivery. 3 years on, the latest batch of comments (4,997 in total) on their pitch page are hilarious - provided you are not a shareholder. We particularly liked this one - 

I listed mine on Ebay with no reserve! Get a great deal. And yes, I will actually ship them to you quickly.

Now in a final twist to their latest ECF round - they started on Crowdcube and are now on Seedrs - they have told SHs that the valuation of this round - which has been on Seedrs for ages - is coming down by 20% to accommodate a large EIS fund investment. So the Crowd was allowed to be over charged but not the EIS fund? Fills you with confidence and belief in ECF doesnt it. 

Oh and we forgot to mention the main reason for the email was to tell SHs they could now take up their pre emption rights at this new exciting discounted value. Are you that stupid?

On the Seedrs pitch there is no mention of the problems with delivery to over 7500 KS backers, the demands for refunds, the breakages, the product downgrading and software inadequacies. What they do tell punters is that they have pre sold £4.5m worth. How much is owed back in refunds, lost in breakages and not delivered at all after 3 years. Those numbers are not available at this time.  

You do have to ask if Seedrs under Jeff Lynne would have allowed this nonsense. 

Kokoon - what is the real story here?

Kokoon are currently well on their way to raising more money on Seedrs, they have already used Crowdcube and more importantly Kickstarter. The constant stream of complaints on the KS pitch suggests that things are not quite as the CEO has told investors on Seedrs. 

We all know that complaints on a platform like KS can be exaggerated - people with an axe to grind, people who just like complaining etc etc. However, there will be over 4,700 comments on their still unfulfilled KS campaign page as of this weekend. 99% are not complimentary. 

Customers have been misled is the common theme. Stock that has arrived is on the whole disappointing, refunds are slow or not processed, delivery dates are a joke only surpassed by their communications, mechandise breaks and arrives broken. And the final straw is that the sold software to give users sleep feedback and imporatantly give them help in sleeping, is simply not available yet. 

We have held off writing more on this as they appeared to making some positive progress. But really enough is enough when the CEO states on Seedrs that most of the KS customers have been satisfied and the failure rate is under 3%. You wonder if he has read the comments. They are getting rapidly worse. 

Here are a few examples - from just the past few days

I am again requesting a full refund of my money. I haven’t heard from you. Please respond.

• Yes it is all very disappointing and discouraging to hear about the issues people are having with this Best of all possible worlds, sleep aid headphone.

  It appears to be anything but. Broken parts, Poor sound, non functioning features, and the rest make one feel the wait was not worth it.

  Now 3 years since the original shipping estimate and I, like many of you, are still waiting for delivery.

  I had many chances to get a refund, but decided to wait it out.

  Now, I am not so sure.

Never received any communication about shipping. I confirmed my address in January 2018. I would like a refund as well.

Was so excited to see the headphones had arrived. Lifted them out of the impressive carry case inside the box and ... snap ... plastic bit around the metal post snapped off. Jesus H Christ. Didn't even get to put them on and they are broken. What now?

..................................................

In my experience I have never seen such a shambles pretending to be a business.  

Now we read that Kokoon have stopped issuing refunds - the excuse being that the factory has committed to making the remaining KS stock - which we should point out has not been delivered and there is no date given for its delivery. This is shoddy customer management. It is shoddy everything. In fact is it legal? i was under the impression that a UK product manufacturer selling on line had to offer a 14 day no quibble money back guarantee after they have delivered the goods. Well Kokoon have not even delivered and they are refusing to give backers refunds - 3-4 years after taking their money. 

Kokoon launch new Seedrs. Will investors listen again?

Kokoon make sleep assisting headphones. They presold thousands of them in 2015 on Kickstarter, many of which have still not been delivered. The Kickstarter forum makes for interesting reading.

We haven't seen the terms of this latest raise. Im not sure we want to. All you have to do if you are interested in this company as an investment, is look at their KS campaign, the claims they have made over a number of raises, on Seedrs and Crowdcube and then look at what has in fact really happened. The last Crowdcube round was at the end of 2018 - a private round  - we do not know the outcome.  Given that they are now on Seedrs, maybe it didn't go so well?

We now understand that they have raised (18 Feb 2019) another £800k from existing backers. The Seedsr round is about to launch.

Everyone knows how difficult it is to get a new product to market. Everyone knows how many delays there will be with tech product iterations until they become scaleable and saleable items. We all know all of this. Clearly Kokoon didnt.  As if they had they would not have sent forth projections to gather funding which now look ridiculous.

We have been writing about them for a while - here 

They seem to be best at ignoring the obvious. That tactic may yet work but please dont be fooled by what you read in their pitches.

You can find the KS campaign here - 4338 comments and counting. The KS campaign attracted just under £2m from 8,400 punters with a delivery date of September 2015. How many exactly of these have received their headphones by 2019 is not clear. What is clear is that many have not. Those that have, seem on the whole, to be satisfied or maybe that is just knackered from 3 years of insomnia.

Kokoon launch private Crowdcube round in desperation as their Kickstarter customers carry on complaining

Happy Christmas from Kokoon - the guys who help you sleep tight at night. Now you have paid for your headphones - well you paid £2m+ 3 years ago and we still have only delivered a few, and we have run out of cash, again, we are back on Crowdcube privately selling more equity. We thought that would bring the cash in, in this season of Good Will.

The valuation in this Crowdcube round is up by 50%  and it is still ludicrous. We have written about them before - here

Much in the same way as May is blackmailing MPs, her deal or ruin the country, so Tim Antos, the CEO, knows investors will see this as give us more cash or we go under. Which is in fact what he should have said in the last Crowdcube round. 

Tim wrote - in all seriousness - 'With so many of you expressing interest in following your money to maintain or increase your stake we’re delighted to be making this round available to you privately via the Crowdcube platform.' 

That is not the impression we get from talking to investors. But he should know. 

We still have no real idea if the product is any good. The first few that have gone out have had a good but mixed reception - certainly not great. People still demanding refunds. And so few have arrived with customers when compared to the 'sales' that you have to wonder about the numbers. It doenst really help that Kokoon has been selling the headphones off their website for delivery nowish when so many people who paid 3 years ago have not seen a thing. That is simply wrong. 

The whole pitch is a little odd. Target £600k. 7 invetsors have put in £498k at the opening. Largest investment £478k. Crowdcube funding??

We smell the usual Crowdcube BS. Cash in, followed by fire sale and all investors in this round lose the lot. 

Mind you if that keeps you awake, maybe you should invest. 

Kokoon - selling on line to raise funds to deliver 3 year old Kickstarter stock?

This is a Cuckoo Clock. If you watch it for long enough it will chime. Well it will chime before most Kokoon backers get their 3 year late headphones. 

We thought that recently Kokoon, which raised £1.65m on Crowdcube a year ago, might have got their act together. Like their deliveries, we called it too early.

When Crowdcube punters invested in this company, on the back of promises that the product was ready to go, they were duped. We shouted this out at the time - it was obvious from the feedback on the then 2 year overdue delivery, that the company had some serious problems. Having sold several thousand units on Kickstarter and spent the cash, they came to Crowdcube to raise money to make the units they had already sold. The money from these sales was promoted as an asset rather than a liability. As of today, only a few have been delivered. The spec has been lowered the tech reduced. Refunds have been demanded.

Now if Crowdcube investors had been members of our soon to be launched ECFBuzz site, where all of this information would have been available and they could have chatted to KS backers, they might still have invested but with the full facts.

https://www.indiegogo.com/projects/ecf-buzz-the-crowd-investors-information-centre/x/19804529#/  

Neither Crowdcube nor Kokoon told investors the full facts. The headphones were not ready to make and ship out - they were still in testing. Testing that has resulted in the product being altered and delayed.

Now their website is promoting a Black Friday Weekend 30% off offer, for delivery by December 2018 in the UK. But people who bought this product on KS 3 years ago have no product and no idea when they will get one  - if ever.

Is it possible that the company is selling product on line now, knowing it cant deliver (this is after similar to the outcome on KS) to raise funds to make more items to deliver? Cannibalism on speed. 

Kokoon guilty of a grossly misleading Facebook sales pitch

Kokoon, a technology design company that is trying to make sleeping headphones, are now claiming that their first shipment is 'almost sold out' on a FB sales pitch meant to persuade people to buy more headphones. 

UPDATE 24 Oct 2018- A few headphones have now arrived with the KS crowd so at least they do exist. More on their way so hopefully for Crowdcube backers the chances of the company closing have diminished.

https://kokoon.io/product-buy/?utm_source=facebook&utm_medium=cpc&utm_campaign=retargeting

In fact Kokoon sold this first shipment (just a few hundred sets) over 3 years ago on Kickstarter, when it took in more than $1.9m in pre sales from almost 8,500 backers. Since then they have raised £1.65m on Crowdcube to cover the costs of making these pre sold sets. However as I write only a handful of samples have been despatched. Money put into the company now, generated by this new sales push, will go backwards to make up for the shortfall of capital required to make the product they have already sold. It's kicking the can gone mad. Losses (£1.1m for 2017) are mounting as the company waits to clear the backlog of pre paid orders.

And the product hasnt even passed muster yet. Watching this shanbles unfold. It seems obvious that there will be large teething problems with the first second and third batches and that the backlog will not be cleared in 2019. So their shipping estimate on FB is a joke.

This is a clear breach of any rules there might be for promoting your sales - you simply cannot lie to people.

It makes you worried for those Crowdcube investors stupid enough to put money into this company - even if it was only to get a set of headphones to help them sleep. Headphones seem hard to come by, as the 3000 plus comments on KS, will confirm. Refunds are being issued but are not being received; or so it would appear. Who is paying for those?

Kokoon - a labour of love as Crowdcube backed company still hasnt delivered KS backers goods.

Thought people might be amused by this - dare say the company will eventually get its shit together.

Someone on KS compiled the list of promises that Kokoon have made to backers to date - 

Kickstarter May-June 2015 – Product shipping February 2016 (7 months)

September update 2015 – Product shipping September 2016 (12 months)

January update 2016 – Product still shipping September 2016 (9 months)

April update 2016 – SDK release pre-launch after August 2016 (5 months)

May update 2016 – Tooling left before mass-market (4 months)

June update 2016 – Factory will give realistic shipping update (3 months)

July update 2016 – All units shipped 27th of February 2017 (7 months)

End of September 2016 – All units shipped 31st of March 2017 (6 months)

November update 2016 – Will need updated shipping estimates, when tooling starts, this will be more reliable and straightforward (4 months)

End of December 2016 – Shipping starts 16th of June 2017, very confident (6 months)

Beginning of April 2017 – Shipping starts 26th of June 2017 (3 months)

June 2017 – Golden Sample made, no problems – Shipping starts 15th of September 2017 (3 months)

End of July 2017 – On track – Shipping starts mid September 2017 (1,5 months)

September 2017 – Shipping starts November 2017 (2 months)

Early October 2017 – On track – Shipping starts November 2017 (1-2 months)

Mid October 2017 – On track – Shipping starts November 2017 (0,5 – 1,5 months)

Mid November 2017 – On track (-ish) – Shipping testing units end of November, Mass market within December 2017 (0,5 – 1,5 months)

December 2017 – Shipping testing units end of December, mass market January 2018 (1-2 months)

January 2018 – Tests will be passed, Mass manufacture April 2018 (4 months)

Mid February 2018 – On track – April 2018 (2,5-3,5 months)

End of March 2018 – Start slow mass manufacturing in May 2018 (2-3 months)

Early May 2018 – On track, slow mass manufacturing start end of May 2018 (1 month) [If ordering on website, to get in the first batch, june shipment]

Early June 2018 – Shipping to backers starts July (1-2 months) [If ordering on website, to get in the first batch, july shipment]

Late July 2018 – First mass production will start beginning of August (1 month)

August update - shipping starts in December/January 2019 (4-5 months)

Crowdcube funded Kokoon announce more delays, an online data storage issue and more.

Kokoon used Kickstarter to pre sell their sleep enhancing headphones 3 years ago. Then they used Crowdcube to raise £1.65m six months ago. So far, nothing has been delivered except for broken promises.

This one just keeps on going. Every time they set delivery dates, they postpone them. Everytime they declare the product ready, it has new tests. To date the KS forum is setting something of a record with over 2500 comments. The latest update says there is no date for completion or shipping. Just more testing - into year 4.

We did warn you - - several times.

Their Australian customers are getting a little nervous as the Government there is about to put a 10% tax on all consumer imports - that's in a couple of months.

Kokoon recently announced that their app will down load sleepers information to the cloud. This has caused quite a stir as it apparently wasnt made clear that the headphones would have to work on line or that any data would be stored. Coming at this time, when FB is under such scrutiny, is not the best.

There is a rumour that they have stopped issuing refunds. Most of the comments are not complimentary. You investors must be holding your breath.

More when we have it. 

Kokoon - what the hell is going on hear?

Kokoon are a mystery. They have raised enormous sums based on a product that is still to be completed and the Kickstarter crowd are baying for blood. We did warn you Crowdcubists.

We all know that Kickstarter projects get delayed and some never deliver. But it is unusual in our experience to find one that has pre sold on KS to the tune of £2.8m, with delivery for February 2016, and that then has raised £1.65m on Crowdcube in August 2017 and has to date failed to deliver anything other than excuses. In this Crowdcube pitch they, Kokoon, promised the product was now ready for sale and talked about a large retailer's purchase order arriving 'in weeks'. Delays were over. Regretably, that was all a lie.

We warned readers that the project was on the cusp of coming off the rails. Not because the product isnt any good or because it is some elaborate con. Simply because the guy running the show is a shambles. You still invested. 

Now, as yet another deadline for production passes by like some endless goods train pulling into Port Headland, the volume of complaints on KS and the number of demands for full refunds, has risen substantially. There is still no set date for completion of the first production run  - in fact there is no set date for its start. The product has changed (for the worse according to backers) beyond recognition. The £2.8m pre order cash has all been spent and this must now be considered a liability given none of the headsets have been delivered and people are asking for their money back. It is all going rapidly to shit.

Here are some of the recent comments - 

.............................................................................

now, actually after a few month it became very obvious that project management isn't our developer's best skill ... so I didn't mind about all the delays and changes through the years. But from the first design concept I had hoped to get headphones which would be suitable to use while sleeping, especially as a side sleeper. I think the (almost) finished project is far away from that point ... and that is the real issue.

I sent a direct message to @Tim as well as the project yesterday asking for a refund. Tim came on 3 hours ago and didn't reply to my message. I also tried to send an email to the kakoon.io email address provided, but it is not valid.

Long story short, where is my refund?

Please do not ignore us.

I’m backer #12, I have lost faith on your product and your updates full of excuses. I would like to get refund!!!

Can someone call the police in England? Tim Antos is the name.

One word comes to mind....shameless.

According to your crowdcube documentation you envisage the headphones having a life of a mere 2 years - your backers have waited significantly longer for the product to arrive.

You need to stop the excuses & deliver what you promised.

When are y’all gonna get it? This isn’t “miscommunication” or “unforeseen” anything. They knew when they made that video they were misleading us. That they didn’t have the product anywhere near the level they said they did. Maybe they HOPED they could deliver, I don’t know. But they knew they weren’t presenting things as they were. They’re liars. Quit appealing to a conscience that they don’t have.

....................................................

There are 2,400 comments  - most of them negative. It is what happens when you have a product developer in charge of a business - chaos. Kokoon for your own sake please ditch Tim and get yourselves a real CEO before it all goes tits up.

Testing times for Kokoon insomniacs.

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.

Kokoon offer their Kickstarter backers refund using Crowdcube equity finance

This is a first - although we trailed the possibilty in our last post on Kokoon. They 'owe' KS pledgers either a fully finished product (not currently available) or $1.9m as they have now agreed to refund them. 

The Crowdcube campaign was led on the premise that these sales were bagged - accounted for and in the revenue pot. We pointed out that as the number of complaints on KS mounts and people demand refunds, this was crazy. It is in fact a massive liability. 

Just 3 days ago the founders posted this message on KS -

Thank you for your messages. We’re currently working on our next update, which we’ll be sending out when Richard returns with the latest news from the factory in China. 
If anyone would like to request a refund, please send us a direct message on Kickstarter or an email (with your backer number) to support@kokoon.io and we will arrange it. 

There is no product - design yes but finished item after 2 years - no. More delays were announced a few days ago.

Do CC investors know that the KS cash has been offered back? Cash that is described by the company as sales revenue even though it isnt. Where would the cash for refunds come from exactly? And why isnt any of this mentioned in the CC campaign?

Are Kokoon or Crowdcube listening?

We think this is a first. Having not delivered to 8500 Kickstarter backers, Kokoon are valuing themselves at £6m and raising £750k on Crowdcube, using the 'sales' on KS.

Well in fact that isnt true as they have pre raised (off CC) £625k of this from two existing shareholders already. You know, the usual Crowdcube games.

What's quite astonishing, are the 2100 comments on their Kickstarter campaign, which enabled them to raise just short of $2m in 2015, to develop their headphones. More than 2 years later, despite numerous false dawns; they have not delivered an item. You can imagine what the comments say but here's a link  - https://www.kickstarter.com/projects/1861630723/take-control-of-your-sleep-with-kokoon-eeg-headpho/description

We never thought anyone would have the balls to try this on. In fact we recently advised a company wanting to raise £2m via ECF, that until they had fulfilled their KS obligations in full, we wouldnt deal with them. And in our opinion nor would investors. And they had delivered half of their commitment.

It makes the recent Retro Computers Kickstarter fiasco look insignificant. Maybe they will be Crowdcube's next tempting offer?

So the Crowdcube pitch states - 'Last year (to the 30th of June), we had £1,114,618 in sales through our Kickstarter campaign'. 

This poses an interesting Q. What is a sale? Surely a completed sale has to include both sides of the deal. Cash going one way, which we have here and product delivered satisfactorily, the other. This second half has not taken place and in fact it turns out the product isnt even ready to ship. It is still undergoing testing according to the KS updates dated 7 Sept 2017 and promised delivery dates continue to slip. Reading the updates and from our considerable knowledge about how badly these things can turn out, we would be highly suspicious of these promises. Refunds have already been demanded - so you could be looking at a debt of over £1m rather the trumpeted sales above.

The bottom line is  - Kokoon are claiming that the cash they are raising is mainly for product development ie forward looking. It's our guess most of it will be to produce the pre sales already accounted for. Or to put it another way, to fill in the large black hole.