Tuesday, 6 September 2016

Here is why Pronto failed so spectacularly

You just have to watch the Seedrs video by Pronto, to see why the company failed - it's complete rubbish.

All equity crowdfunding pitches have videos to promote them. But we have never come across one like Pronto's. 

We know that Seedrs are demanding in their due diligence but we have to question some of the facts in this video - given the very rapid journey to closure. It's worth watching.

Here are some of the claims and facts used to justify them - blue text is taken from the video but not verbatim.

Pronto will replace peoples' kitchens and will make it very difficult for supermarkets to survive. How do we know this - here are some facts - 

Customers order on average 5 times a month
55% customers order weekly
75% customers order every 2 weeks
Mean customer spend is £45/mth
Median customer spend is over £100/mth

This means that the more you order from Pronto, the more you order from Pronto - 

Median no of days between 1st and 2nd order is 9-10. So by the time you are on your 9th order its just 5 days apart and by the time you are on your 19th order, you are ordering every 4 days.

The business is growing at 6% week on week over the last 26 weeks.

How the hell did this get past Seedrs DD? And why did so much VC money believe this rubbish?

Customers are not stats and do not follow these ridiculous rules, percentage increases and customer medians are meaningless unless we have a starting point. The proof is very clearly shown by the outcome. 

1 comment:

  1. Classic VC backed startup that was going wrong and the VCs knew this and didnt do any follow up funding so Pronto turns to the crowdfunders who are duped into chucking money at the sinking ship. Sad