Wednesday, 27 May 2015

Could Sugru be Crowdcube's saviour?






Lets face it, Crowdcube needs a success.

Sugru  - the British designed silicon glue that is forging a niche market in the US - has just launched a £1m raise on Crowdcube.

In 2013/14 the company very nearly came unstuck with a loss of over £1m, falling GPM and spiralling costs. However with new management input, cost cutting and new outlets in the States, they just might be on track for a bright future.

In our opinion there are a few things in the way. Copycat technology cannot be far away, cables and wires for which this has a major use, are things of the past and the name stinks. It's Irish for play  - but so what.

The final hurdle is the perennial valuation. At £25m now, the company is going to have to get a lot right to make investors any money, given that they will certainly need new VC money on at least one more occasion.

Investors have piled in but then they did that on many occasions on Crowdcube, only to see the glue holding it all together melt away and their money head west. This product is trying to be the next Sellotape but surely we have moved on. Technology now moves at a pace unthinkable when the first sticky tape took off.

4 comments:

  1. The product is not just for cables. It's waterproof, flexiable and moudable by hand. Whether they can make the product a household name with wd40 which doesn't have a patent is another matter.

    I wonder why CC never publishes the numbers for the all years of trading? This campany has been going for a few years now and has not made a profit in any of them.

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  2. Yes I realise its not just for cables but in their PR that is a major focus and cables are gone in a few years. Technology development when Sellotape launched and took over the world was so slow compared to todays and tomorrows will be a million times faster. So creating a world brand with a technical but everyday use product is going to be very difficult. They have traded for 3 years with ever increasing losses - over £1m in 2013/14. But claim to have tackled their cost structure.

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  3. On your Crowdcube point - they only ever publish figures that are beneficial to the pitch and they always ensure that projections for existing companies NEVER tie in with the accounting dates for the companies' filed accounts. As this is happening on every pitch, one has to assume they do this on purpose. So for example a company will have 3 years of filed accounts for YE May but the pitch has projections for YE Dec and shows 8 months of 'past trading'. It then becomes very difficult to compare these figures these with the filed ones. Why the FCA do not demand a more transparent system is beyond me - in order to pitch for crowdfunding, existing companies should be made to produce at least 1 years audited accounts ans their projections must be in line with the filing dates. Simple. Tie it to SEIS/EIS and companies will oblige.

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  4. Considering it's tax-payers money the suggestion of aligning accounting YEs to projection YEs makes sense. Doesn't matter because in two to five years time enough punters will realise they are not going to make a postive return in aggregate. I suspect the investments that do perform will be sensationalised with media spin by CC.

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