Beauhurst recommend Droplet as fintech success

We found this published by Beauhurst here - supposedly a fountain of knowledge in the fintech sector. They selected only 5 to write about. They should have known that Droplet had failed to raise funding before they wrote this in March 2016. That failure indicated Droplet's demise and ultimate collapse just 3 months later.

If you are still watching the space as they recommend, the telly has been turned off.

Just goes to show you cant trust anyone or anything - except your own judgement!

Back in June 2013, Mashable published a list of the UK's top 25 tech startups, notably highlighting that the UK’s innovation ecosystem was not solely confined to the then burgeoning London startup scene. But which ones made the cut?

Droplet 

What does it do? 

Droplet is a mobile payment and loyalty app which allows indie businesses to build better customer relationships. The app allows users to pay without queuing, and to collect rewards as they do. But businesses are winners too, as Droplet operates on a fee-free transaction basis.

Where was it then?

Droplet was a pretty savvy bet by Munford, considering the startup had then completed just one unannounced equity deal for a paltry £50k. That said, it was at a relatively sizeable £1.1m post-money valuation. 

What’s changed?

The fin-tech startup has gone on to secure a further 4 rounds of equity finance since June 2013. And this doesn’t include the company’s second Crowdcube campaign, which is currently live and set at £450k. 

Who’s funding?

Ascension Ventures, Finance Birmingham, Crowdcube

What does the future look like? 

Stephen Aquarone, Droplet founder and CEO, says: 

“We’re at the stage where we’re very nearly ready to raise the sort of money that powers the likes of Deliveroo. Once the growth is predictable, larger financiers come in to speed it up, which is how challenger banks like ours get so big, so fast”. 

Well, you heard him – watch this space…

Another Crowdcube 'success' closes

Droplet raised over £500k on Crowdcube and has now closed

We are honestly finding it hard to keep up with the failures funded by the Crowdcube platform.

Droplet had a blog here before as they tried to raise more money on Crowdcube ealier this year but the pitch was suddenly pulled. So in 12 months they have burnt the cash and buggered off.

Isnt this becoming a little repetative?

Luke Lang, never short of a few words, stated on Droplet's failed 2016 raise - 

''Tech businesses, like Droplet, are always popular with our crowd of 245,000 members who have invested £45.5m in the sector, so it’s great to see the business return for a second round of funding on Crowdcube.”

He does love his large numbers.

Droplet's website has the following ambiguous explanation - 

“We started Droplet in 2011 with the hope of making payment simpler, friendlier and mobile-first – and more recently to allow merchants to offer better loyalty rewards to their customers. But sometimes things don’t work out. We always knew it would take significant investment to give Droplet the scale it would need to succeed. In spite of being well supported by our investors through thick and thin and having tens of thousands of customers and hundreds of paying merchants, we never got to the scale to make Droplet viable as a profit-making business.”

The 2015 raise had this in the pitch - 

Already more than 600 businesses have joined including coffee shops, hair salons, bars, restaurants, lunch venues and taxis. These businesses will soon be able to pay a monthly subscription to use the new loyalty product based on how many of their customers are collecting rewards.

Rather than using expensive advertising or a sales force, we market our products through ambassadors inside the communities Droplet helps support.

Droplet is registered with the Financial Conduct Authority for the issuing of Electronic Money. The the app averages 5★ in the App Store and has already has grown to 16,500 users.

Really?????

The financial projections used to sell the equity were as usual complete nonsense - even the actuals proved to be wrong. Maybe the FCA could start their new approach to ECF by looking hard at this case - it has all the hallmark errors you would expect from a Crowdcube raise. They might also like to check the way these iffy companies tart themselves around the platforms - this one appeared last month on Syndicate Room - http://fantasyequitycrowdfunding.blogspot.co.uk/2016/06/droplets-mirage-now-appears-on.html

Need any help boys you know where to find us

Droplet's mirage now appears on Syndicate Room

Droplet raised over £500k on Crowdcube in 2015 - valued at around £4m pre money.

This year they tried to raise more on Crowdcube but the pitch was pulled very early on - we wrote about it here. Now they have launched a new pitch, this time on SR raising £433,000 at a pre money valuation of just £3m.

Firstly hats off to SR for being the first platform to have a pitch where the value has reduced since its last round. 

The pitch on SR bears little resemblance to the figures given on Crowdcube in the first raise and even less to those given in the pulled CC pitch only 3 months ago. Because SR have chosen not to compare like with like, its impossible to make any judgement but that in itself should ring some alarm bells. The pulled CC pitch had revenues for 2016 of £400k and the company said it was raising a total of over £3m in equity finance this year. 

The name of Crowdcube is not mentioned although there is reference to crowdfunding - but not to the pulled campaign. we would certainly want answers to these points.  

Droplet evaporates

Droplet's second visit to Crowdcube was very short lived.

All references to it have been removed by Crowdcube. This was the result of a Google search -

blog.crowdcube.com/2016/02/23/droplet-returned-for-round-2/

23 Feb 2016 - In April last year, Droplet raised £549,020 from 298 investors in order to grow its ambassador network, reduce the cost of acquisition of ...


But when you follow the link all you get is - 404 Not Found!

However we have been able to find some of Mr Lang's usual PRing on the subject, kindly reproduced two weeks ago by His Masters Voice, Crowdcubefund Insider - 

Luke Lang, co-founder of Crowdcube, commented:

“Tech businesses, like Droplet, are always popular with our crowd of 245,000 members who have invested £45.5m in the sector, so it’s great to see the business return for a second round of funding on Crowdcube.”

And Amen to that came the cry from the 245,000 Crowd.

So - the obvious question is, where has it gone? They were a long way off their projections, even by Crowdcube standards, so maybe they have been cut adrift to sink slowly like so many of Crowdcube's success stories. Ah well, another one bites the dust. Better luck next time everyone. Jesus only walked on water once you know and he was God's son.

Yet another Crowdcube pitch that hasn't told you the truth.

It is hard understand why Crowdcube keep playing the same game, when they are clearly losing it.

Hiding information from investors and using misleading information in their pitches is a practice that really must stop.

The latest example is Droplet.

In the pitch, the lead of Droplet is given a glowing CV - ''Steff is an entrepreneur with a track record in making things happen'' the pitch purrs. Yet it takes a only a few minutes to find out that Mr Aquarone success is skin deep. He has had two collapses - going down owing over £800k and really done little of any great note on the success side. In fact we couldnt find an example of Mr Aquarone ever making a profit worthy of mention.

His 'film' Tortoise in Love, which he claims in the pitch was sold around the world, received poor reviews everywhere we found it and appears to have had a £160k budget according to IMDB. Mr Aquarone's production company, Immense Productions, which was involved in the film, closed shortly after it was released, with a negative balance sheet.

No one here thinks failure is an inherently bad thing. You learn more from failing than you do from success.

But it really is time for Crowdcube, in particular, to pick their game up and start telling investors what actually happened. If you cant believe what the business pitch tells you about the CEO, then why would you have any faith in its projections? It is all pretty desperate stuff.