Rentify file losses of just under £2m as they reach for more stars.

Rentify are one of Crowdcube's million plus club. £1.38m in 2016 to be precise. They were due to make heavy losses whilst they gained traction but it appears that subsequent funding has not materialised and now the company accounts show a deficit of £2.25m; up from £500k. 

Rentify are also backed by Crowdcube's big daddy, Balderton Capital. Helps to keep it in the family.

Rentify are not a million miles off their p&l forecast - well £300k isn't a lot on Crowdcube. The main problem seems to be the lack of investment. Projections show the company having over £12m in share capital by YE Dec17 but the accounts are over £3m short of that.

Why Balderton have not reached into their deep pockets for this one is unknown. They have of course spent quite a sum on Crowdcube since 2016.

Rentify had £2.5m of current creditors and only a fraction of that in the bank or due. One of the major debts is to HMRC  - around £160k in back taxes mostly related to the staff of 26 - this £160k being more than double the year before, when they had more staff. Trade debtors has fallen by 75% from £40k to £10k. Could be new systems or something else less helpful.

These are the same guys we wrote about recently who have made up their Trust pilot star rating. According to them it's a 5 star. According to Trust Pilot it is 3 star. Who believes star ratings anyway but you'd think they wouldn't make them up! Latest one posted is a 1 star. Our rule with these ratings and we have some experience in the last 20 years, is to look carefully at the poor ones to see if there is a common thread. Many of the good ones are set up and so are many of the rest but a thread leads to the truth. There is a thread with the 1 star ratings for Rentify.  Onwards and sideways.

 

Rentify tempted to tell you what is not quite true

Rentify raised £1.3m on Crowdcube. Now their website declares the company has a 5 star rating from Trustpilot.

The real TP rating - the one on TP's site - gives Rentify 3 stars.

What Rentify have done is cunning. They have produced an image of 5 stars with the TP logo as if it it is the TP rating. Its there front and centre on their home page; you cant miss it. Then underneath they have written 'over 400 5 reviews', where it is quite easily missed. They do have over 400 5 star reviews. But Trustpilot produce an aggregate star rating - they are not about the 5 star or the 1 star reviews only. For example say a company has 5000 reviews - 450 of them are 5 star but the rest are 1 and 2 star. You could not claim that your Trustpilot rating was 5 star - unless you lied. It would be below 2. But you could still claim you had over 400 5 star reviews.

This is certainly misleading if nothing else. The claim is they have a 5 star rating with Trustpilot. They do not. Is that indicative of a company ethos?

Balderton Capital, major Crowdcube backers, are also one of Rentify's main funders. The company is currently late filing accounts. According to their Crowdcube numbers this year saw them leap into £1m+ net profit territory. Hope that wasnt too misleading.

Rentify finally file accounts showing they are blushed with 'success'

Rentify helped themselves to £1.3m on Crowdcube, at a valuation of around £20m, last year. Their latest accounts to YE DEC16, filed late, have them technically insolvent with a large hole where projected further investment was promised.

We read recently that this blog is primarily for bashing Crowdcube. Well that only tells part of the story. All we do is follow the pitches that fund on Crowdcube - the news here is only 'bashing' because those are the real results these companies are producing. Unlike some others, we dont manipulate the numbers.

Back to Rentify. They made a £2m loss for the year, which is in fact better than the projected £3m loss. However the problem starts when you look at their funding. The £6m of new equity investments shown as coming in 2016 has not appeared and the company has so far in 2017 managed to raise not a penny.

We have warned about this type of thing on numerous occasions. Promises of future large funding events are more often than not a smoke screen for something well worth avoiding. The future of any business is entirely reliant on its liquidity. Rentify dont have any. The company has lost 4 of its Directors this year - another big red sign to stay away. One of them was Simon Grice who founded Ineed - another failed Crowdcube company.

Rentify is backed by Balderton Capital, one of Crowdcube's main backers. Any patterns appearing? Maybe they will shake their money tree once again.