The Goodbox saga has taken another twist and it appears that NGi may not be the issue.
Another investor posted this FT link in the Seedrs forum:
In summary, the FT says a Guernsey based investor called “Q Invest” invested £4.5M in the future fund round. Then the FT says, shortly before completing the funding round, Goodbox licensed payment gateway software from “Q Invest” for £5.2M. So “Q Invest” received their original investment back plus £700K.
FT also quote NGI’s secretary as saying “We consider it in the interest of GoodBox for administrators to be appointed by the Court to scrutinise certain questionable dealings of the Board. A key example is a £5.2mn transaction that involved UK taxpayer funding.”
I thought my theory was the worst-case scenario but this is absolutely insane. So, the board actively tried to defraud the Future Fund by arranging a totally legitimate investment that just happened to be repaid afterward by purchasing software (what are the odds any money actually changed hands, except for the £700k?), so that they’d qualify for the government’s funding? Wow. The board is in big trouble. At least the other companies that tried to do similar things were a little bit subtle about it.
Over the last few years, I invested in 17 start ups between Seedrs and CC and only one of them has gone bust for now. Fingers crossed I don´t have increase this count!
The company is Coconuts Organic, later renamed as Cecily´s, a brand of vegan icecream that use fat from coconut oil instead of cow milk for the elaboration of the product.
They raised three times through Seedrs until earlier this year they announced that the company would be sold to a new shareholder for GBP30k with no rebate for Seedrs investors. (ie, from whatever you invested to GBP0)
The increase in the cost of ice for deliveries and the lack of commercial traction among big UK retailers were pointed as the factors that took the company to such a difficult financial situation. What´s frustrating is that the brand still trades, but all Seedrs investors have been pulled out of the shareholding of the company.
It would be worth investors checking out the claim made in the Seedrs 2019 round when they stated that Founders were investing in this round to a min of £200k. Looking at Ch filings there is little evidence this investment by the two founders went ahead. If it didnt, then Seedrs are in clear breach of their FCA licence and all investors in Goodbox in that round will be able to claim back their full investment via the FOS.
I think Pluto will follow the same path over the summer. The latest update said they could not secure any additional financing and they are looking to sell the tech but does not see very likely or for anything significant. To be fair they lost their way a bit as they were initially a travel insure-tech and then pivoted to a sort of Pinterest for travel.
Also saw an update from Honcho that sounded ominous. End of summer will bring some clarity but seems that it might not look great.
They raised on both CC and Seedrs.
I closed my dozens account earlier this year, and moved my funds to Freetrade. I was only there for the 5% promotional bonds. I did not invest in the company itself.
The company itself isn’t closing (yet) though, only their B2C business. I never saw Dozens itself as a profit center, merely a dogfooding exercise for Project Imagine. There are lots of building societies for example without their own apps, these guys should be building them.
I liked the original idea of Pluto and invested in the first round but the change to being a Pinterest was awful. I felt they were hopelessly naive and had no business model at all when they moved away from the insurance angle - appreciate it was due to covid and all that.
I’ve noticed that Seedrs investments result in more liquidated startups compared to Crowdcube. I’ve already had 3 successful exits (although small gains) on Crowdcube, while having 7 liquidations on Seedrs. The only exit I’ve had on Seedrs was Seedrs investment itself.
While I can empathise with your position, in start up terms I don’t think that’s enough of a sample size (and we’re not given any background as to number of investments you’ve made and how long you’ve been invested) to draw any major conclusions. I’m not defending either platform, but you might just have one massive exit or several more liquidations which will skew your personal statistics.
I hope your other investments result in some big wins for you!
Oval Money (Seedrs, 2020) liquidation confirmed that investors in the Future Fund round will get 6p for every £1 invested. Investors into shares (Seedrs, 2019) will get nothing.
