Last updated: March 20, 2017 at 23:06 pm
I haven’t had such an infuriating train journey for quite some time and this time I can’t blame the trains or the chap sitting opposite excavating his nose. No, this time I only have myself to blame for trawling the ‘closing soon’ pitches on Seedrs and stumbling into recasher, due to close in just a couple of days.
The basics are thus. They’re trying to raise (although I doubt they will) €500k for 5% in their loyalty card/payment system/cashback service. A staggering €9.5m valuation for a company with no mentioned revenues to date. So far they’ve managed just over €154k from 47 investors.
Reading through the pitch and alarm bells start going off at regular intervals. It seems ReCasher is a spin-off from another company called Goldato. Goldato will apparently licence the software to ReCasher with no ongoing requirement for royalties or other payments. Over in the discussion board it turns out the licencing is actually going to cost ReCasher €750k in 10 years time. The definition of ‘ongoing’ also feels very loose, what if ReCasher want to upgrade or have the product enhanced? The terms of this arrangement do not provide anywhere near the amount of detail I would expect, I was out at this point in the first paragraph.
Despite deciding not to invest I persevered through the entire campaign with its grammatical mistakes and terrible spelling (OK, my English isn’t great – But I’m not trying to raise €500k). Initially I put the poor language down to the locality of the raise and the language barrier, but apparently the company is UK registered despite raising in Euros and having two directors residing in Budapest? The pitch makes it exceedingly difficult to work out what the company is trying to do, it’s littered with buzz words and vague notions – I think it’s basically an all-in-one loyalty card with a payment function, maybe?
Anyway, onto to their website, namely the press section. This is where it gets really infuriating. First off, there’s the press release dated 10th Feb; the language of which suggests the author had input to the Seedrs pitch. However, the language becomes a secondary concern when compared to the opening sentence.
“Shortly before market entry and on halfway to close a € 500k crowdfunding campaign, a London and Budapest based Startup, RECASHER has completely redefined the concept of customer loyalty programs.”
So on 10th Feb 2017 they were “halfway to close” a €500k crowdfunding campaign which if the pitch ran for two months I suppose is true but I take offence to the ambiguity of the statement. The release goes on.
“6 month of development work and over 800,000 euros have already been invested by private investors into the 9.5 million euro valued Recasher Ltd., which currently runs a € 500k crowdfunding campaign on Seedrs.com, one of the world’s most prominent Equity Crowdfunding portals. More than 50% are funded already.”
Now, what do the last two sentences actually mean? Taken literally it reads that more than 50% of Seedrs’ campaigns are funded already. Is that current campaigns, all campaigns, I’m not sure. Whether or not these statements were intentionally written to be ambiguous or misleading – I’m also not sure. I would however have thought Seedrs would have taken an interest in ensuring they were clear and accurate?
It gets better though; the first article listed in their press section written by Samantha Hurst at CrowdfundInsider (mis?)interpreted the press release to generate this statement.
“Since its launch, Recasher has successfully secured more than half its initial funding target. It is set to close later this spring.”
This, remember is a company that today (13th March 2017) has raised just €154k of their €500k target.
And another view from finextra.com who regurgitate this from the original press release verbatim.
“Shortly before market entry and on halfway to close a € 500k crowdfunding campaign”
This interview from eu-startups.com again dishes up much of the press release but somehow manages to contradict it with this Q&A (containing a link straight to the documents pages on Seedrs which you wouldn’t be able to access without a Seedrs account or authorisation).
“Q. Have your raised money? How does your financial background look like?”
“A. So far, the project was entirely financed by our founders. We have recently initiated an equity crowdfunding campaign with SEEDRS in the UK, to provide an investment opportunity to the greater public in general and our potential partners particularly.”
Investin.com go even further than the previously quoted 50% and have picked a number over 50% – Seemingly at random
“In today’s world, people are trying to make their money go further and last longer, it is time to bring coupons into the 21st century and ReCasher is here to do just that. ReCasher has an ongoing Seedrs campaign, at the time of writing it is already 55% subscribed. The opportunity to Invest in a startup with a focus on loyalty programs does not come often.”
Now, I will admit I don’t have the evidence that halfway through the campaign they were over 50% of their target. What I do know is that they are currently at 31% – So either something went badly wrong that resulted in a lot of money being pulled from the campaign – If this were the case, I would have thought there’d be some discussion about it. Or, the various so-called crowdfunding news sites are lackadaisically regurgitating press releases from any source with little regard for accuracy.
I’ve personally never taken an article on any of these sites at face-value but sadly they do get traffic and ‘likes’ on the various social media sites, one article had received over 2,000 hits! – Just keep in mind that a company raising money is only ever going to direct you to what they want you to see. Whilst these sites aren’t great the sourest taste has been left by Seedrs – In my view the campaign page on it’s own should have been enough for them to say “no, this won’t hit its target” despite this they let it go ahead and it has been a complete flop and the ambiguous information that surfaced from the press release halfway through the campaign should have put a stop to things there and then. Sadly, the campaign has been left to run its course and lowered my opinion of the platform.
Update: Seedrs have said the campaign was half way funded at the halfway point but a large investor pulled out. No one noticed this on the discussion board apparently.