It is now known that at least 32 formal complaints have been received by the crowdfunding platform that helped Emoov raise almost £2m just a few months before the online agency collapsed.
At the weekend The Times reported that some 20 complaints had been received by Crowdcube, the platform in question. Now Crowdcube has told Estate Agent Today that, as of Monday evening, the number had reached 32 - that number may be higher by today.
In addition, Crowdcube now says it is “liaising with administrators” acting for Emoov and promises that “we will provide further updates to investors when possible.”
The investment row has erupted following the collapse of Emoov last week and the appointment of administrators. Although lettings platform Urban - also owned by Emoov since the spring - has now been purchased back by its founder, there has been no news on the sale of assets belonging to Emoov and Tepilo.
EAT revealed last week that Emoov revised its own company valuation from £104m to £51.8m at the end of its most recent crowdfunding exercise on Crowdcube.
However, this was within the cooling-off period when investors can review their investment and change their mind if they wish. Such a tactic is legal and Crowdcube has told EAT that it is not unusual.
Emoov used Crowdcube on a number of occasions to raise funds. In its most recent crowdfunding bid, which closed in late July, it raised a reported £1,923,060 from 1,119 investors; then, during the cooling-off period, it revised down its valuation.
“It's not uncommon for pitches to drop their valuation during the funding process, including at this scale” says a Crowdcube spokesperson.
In the meantime, EAT has been passed a copy of a letter said to be from Crowdcube to one of the Emoov complainants. It is reproduced in full below.
It has been put to Crowdcube which has told us: “We look at all correspondence very carefully and respond accordingly, though some of the same information will be given in response to similar complaints.”
Letter from Crowdcube:
Thank you for your email, which we will consider and respond to as a formal complaint.
We understand and share your disappointment at the outcome for Emoov investors.
However, as we underline on our platform, there is a very real risk when investing in startups and growth companies. As always, Emoov’s pitch was reviewed according to our due diligence charter, and approved as a financial promotion.
Any claims made on the company’s pitch on Crowdcube, including the financial section of the pitch, were subject to our standard due diligence and were therefore verified with evidence before being approved as a financial promotion. Any additional claims made outside of the pitch or post the raise on Crowdcube, would not be verified or approved as a financial promotion by Crowdcube.
In the cooling off email that was provided to all investors prior to the capture of funds, the company reduced its valuation and confirmed that they would require additional funding. Investors were able to withdraw their investment during that cooling off period.
You can access our Due Diligence Charter, which is public on the Crowdcube site, here.
It’s always disappointing when a business doesn’t succeed but please be assured that we will be liaising with the administrator over the coming weeks and we will provide further updates to investors when possible.
Please consider this email as our official response to your complaint. If you feel we are unable to rectify your complaint to your satisfaction, we would like to make you aware of your rights to escalate your complaint to the Financial Ombudsman Service at the below details:
Financial Ombudsman Service
phone: 0800 023 4567 or 0300 123 9123