Limited information is being provided at this time

Last updated: August 14, 2017 at 21:15 pm

We actually got some real news from Houseology today, initially I noticed a response from Stuart McGhie on the discussion board apologising for the delay in providing an update and also stating that they have “raised a further £400k from existing investors” apparently to allow them to go from a loss making company with lots of stock to a profit making company, I presume with less stock? Further to this, the post states that we investors should have received an email from the chairman detailing progress, I didn’t get an email from the chairman – but I did get an email from Kirsty Grant (of Seedrs) announcing a new round in Houseology for existing investors.

The (£400k) round is now live and there are a few things worth noting.

Perhaps most interestingly, it’s a down round i.e. the supposed value of the company has been reduced, in this instance from just over £9.5m to just over £5.15m – a significant drop! I’m not sure if this is a first for Seedrs, if not it’s certainly a rare occurrence. For a company that provides zero updates for 9 months and has a juicy loss of over £5.6m sitting on their balance sheet at the end of June 2016 having lost over £2.1m over the course of the preceding year, I’m not sure the new valuation is overly enticing. Other investors seem to agree as they’ve managed to raise just £156 between lunchtime and this evening.

The next thing to mention is that the pitch is almost completely void of any detail, we have literally one paragraph about the company, a brief mention of the decreased valuation and a mention of the attached letter (which I haven’t read yet) – the pitch ends with the (I’m sure unintentionally) ironic words “limited information is being provided at this time.”

One final thing to mention is that the post on the discussion board seems to contradict the pitch. To quote Stuart McGhie “We have raised a further £400k from existing investors”, so if they have raised £400k why are they asking us? I can only assume that these funds will materialise if when the pitch fails, perhaps the chairman’s letter sheds some light on this, I certainly hope so.

Update: Since writing this article I’ve had an update from Stuart McGhie that clears up a few things:

  • They’ve already raised £400k cash and it is in their account.
  • There is a total of £400k of shares available to shareholders.
  • The down round reflects the losses incurred.

I’ve been keeping track of the pitch since its launch – so far just over £650 has been committed from 11 investors and the discussion board has just one lonely (unanswered) post.

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