Why the sale of Cake to AMEX has been played down by Crowdcube.

With Crowdcube's PR you would expect the sale of one of their funded companies to American Express in late 2017, to be headline news. Well as Crowdcube shareholders lost money on the deal, of course they have swept it into their large bin of failures.

We brought this story to you last year - here. But more details have now emerged. The buyer was American Express.

Cake got itself into financial difficulty and had no choice but to close or accept the AMEX deal, which valued the company at around £9m. Crowdcube investors had accepted a valuation of £11m when put in £1m in 2015. Large debts meant that most of the sale proceeds went west. Sugru style. 

We think that if Crowdcube had an ounce of honesty they would put both of these two companies up as examples of exits that left their investors out of pocket. After all they claim to be open and honest.

And Beauhurst where does this one appear in your infographics  - exit? dead? zombie?

And of course we shouldnt forget that this is another UK gov subsidised deal that has left the good bits drift overseas for a snitch of the real value - cf Sugru.  

Having your Cake but not able to eat it? Crowdcube land another dud.

Cake has now agreed sales terms with a US organisation, returning shareholders $1.40 per share. This price, which is not yet guaranteed as it is subject to the buyers future approval, represents a substantial loss for Crowdcube shareholders.

Cake took £1m off Crowdcube investors in 2015. Now the founders, Charlotte and Michelle, have agreed a deal where they get a substantial return but investors are losers. But at least they can laugh about it.

This is a deal that gave shareholders no choice - they were not even asked; just told to sign away their shares. So much for the rights of A, B, C or any minor shareholder when founders decide it's time to cash in. And of course the poor old shareholders have to take another big hit as their EIS relief is now invalid and will have to be repaid. Thanks girls.

The US purchaser is unnamed. But the price agreed is around £9.7m or $13.2m. Back in the summer of 17 Crowdcube and the founders backed a valuation of £11.5m. The £9.7m has also to cover some outstanding debts. We had something to say about that then - here 

I know people who used Cake and loved it.

The founders are smiling as the investors, who allowed them to make their profits, sit with large losses. Oh well, caveat emptor or you could take our advice in future. Worth remembering these two as we think they will be back for more!

Cake take a break and are closed for now. So sorry!

Cake Technologies raised over £1m on Crowdcube in 2015; valuing the company at more than £10m. Now their website states they have completed that phase and are moving on with partners to the next phase. We have no idea what that means except that Cake is no longer functioning. 

This may of course be good news, as the company we wrote about here was heading west rapidly and had failed to raise any significant new cash in 2017. They certainly sound as if this is good news in their unapologetic stream of PRing that now greets Cakers on their home page - here. Id be smiling too if I had got away with burning around £2m in 24 months. 

So the company appears to be in mothballs - which if I remember correctly is not a flavour best suited to desserts. What actually happens next is anyone's guess. They are certainly not giving any clues. There does seem to be some connection between the new (Oct 17) directors and American Express but nothing confirmed. In terms of the market, new players since 2015 include Revolut, who now offer a similar service via their card. 

Thanks to the anon heads up on this one. 

Cake - Give Me CAKE!

Cake Technologies raised £1m on Crowdcube in 2015. Accounts to YE Dec 16 show losses of £2.4m and a large deficit on the BS. 

This is odd as friends of mine in the City swear by it. So whats happened to the plans?

Well firstly they have failed to raise the £5m projected equity funds since the £1m on CC. The losses are only £100k higher than projected, which is probably a result of the funding issue. Since the 2016 YE they have only managed to raised another £100k or so which in no way covers their £600k plus deficit. The CA position is horrible.  

Maybe a lack of traction and lack of venues who accept it, have slowed things down. The patient doesnt look well though. You could say that the Directors have stretched the explanation of their Going Concern clause to the limit.