Farmdrop to expand outside London with £7m of new cash

Farmdrop raised £750k on Crowdcube in 2014. Now with over £11m invested in the company since, they are finally ready to launch outside London.

According to the 'simplistic' (Crowdcube's own term for their projections) projections that Farmdrop used on Crowdcube to sell their equity, they should now be turning over £70m (YE July 2017). According to Crowdcube's own blog, they expect to achieve £3m this year. That's we call really simplistic.

Clearly someone thinks this is going to work on a scale, as investors led by Atomico have just put another £7m into the company. We have estimated that this was at a pre money valuation of around £14m. Crowdcube investors took shares at a valuation of around £2.5m. Atomico invested another £3m last year. We estimate that on the current valuation with dilution assumed, CC shareholders have been diluted 100% but have seen the value rise by 550%. Paper value, that is. Working backwards on 10X eventual EBITDA and a 5 times return on this round (value £21m post money), the company is going to have make a profit of over £10m. At its stated 6% EBITDA rate, that means revenues of £166m. So presumably an early sale based on numbers of current subscribers is more likely. 

The company is nowhere close to break even and it seems to us that after so long in London and with considerable investment and promotions, the revenues are small. But that's the way these tech driven investments go. Build to scale and hope that the profits follow. With the rapidly changing environment we live in we'd be bricking it a little on this one. 

Trust Pilot reviews are excellent unless you check them out by dates. All of the the poor reviews are very recent, possibly suggesting a problem with upping volumes? As with Just Park, the one defining  factor that Farmdrop have little control over is the consistent quality of the produce, once they have signed up a supplier. Bristol is next - worth watching how that goes.  

Seriously folks - more of the same from Crowdcube

So much to report that we have bundled all of this into one post -

Minor Figures - accounts just out - more losses although Crowdcube projections showed profits for the last 2 years. Little traction and even less cash.

Farmdrop - accounts just filed with a handsome £1.96m loss for the 12 months against a breakeven forecast. Profits for 2016/17 of over £4m look unlikely, despite the new and much needed injection of capital. Dilution a gogo.

Ethos Global and Zero Carbon Foods, Little Brew, Jam Vehicles, accounts depts on long term sabbatical.

Rough Runner - due net profits of over £400k and filed actual losses of more than £200k. Using Micro accounts but supposed to have turnover of almost £1.5m

Monii - funded less than 12 months ago and reported liquidation but no confirmation. No presence on the web.

All looking good.

Farmdrop secures a £3m investment

Farmdrop have secured a £3m investment in their on demand farm produce delivery business. CH shows a new allotment in 2015 for ~£2m but its unclear if this is part of the new announcement or a seperate issue.

We wrote about them after their £750k raise on Crowcube in 2014

http://fantasyequitycrowdfunding.blogspot.co.uk/search?q=+farmdrop

Hard to know what to make of this latest development. It has to be better than the business struggling along as it was before, but what of the dilution to CC investors?

We dont have a value for the new equity but considering where Farmdrop were - ie nowhere near to their projections - it seems likely that the VCs will have cleaned up at the expense of the early Crowdcube adopters.

Anyone out there who knows  - please tell.

Will be a very interesting watch for the next few years.