Emoov Crowdfunding Investors Threatening to Take Legal Action

10th December, 16:39

According to an article in the Times on Saturday, crowdfunders who invested in Emoov earlier this year using Crowdcube are threatening to take legal action in the wake of the online agent entering administration.

The crux of any action seems to be on the basis that they investors may have been misled over the financial position that Emoov was in at the time of crowdfunding earlier in the summer. Emoov CEO Russell Quirk had forecast revenue growth of 550% by 2019, and a floatation had been suggested to happen in 2019. All seemed to be going well, as the company raised £1,840,000 after targeting £1,000,000 from just over a thousand investors. The crowdfunding round was Emoov's second campaign: in 2015, they raised £2.62m.

The Times states that after the crowdfunding round was meant to have closed, that the value of Emoov was downgraded to £51m from £104m, with investors given four days to decide whether or not to continue. The lower valuation was said by Quirk to reflect concerns about the slowing property market.

Emoov said that it run out of cash because funds promised during their merger with Tepilo and Urban.co.uk had not materialised.

The times quotes one supporter who said it was not made clear to potential investors that Emoov "at risk of failure in a matter of months if it did not immediately raise further finance".

Crowdcube, for its part, is very clear on the risks undertaken when investing in start-ups and early stage businesses and that any investment should only be done as part of a diversified portfolio. The crowdfunding platform has received 20 complaints in relation to Emoov.