At the start of 2024, Daan is in a catastrophic financial position, far from the image it projects publicly. While 2022 and 2023 were marked by collapsing sales and mounting losses, the company keeps displaying unshakeable confidence in its external communication, cultivating a success story increasingly disconnected from its financial reality.
And that’s when the company comes up with the idea of a crowdfunding campaign, via Crowdcube.
According to official communication at the end of May 2024, the company employs 53 people and announces revenue of €6.5 to 7M for 2023, forecasting growth to €8.5-9M for 2024. It even projects a spectacular leap to €20M for 2025, with headcount set to rise to 100. This upbeat communication nonetheless glosses over a much darker financial reality: revenue actually fell by 14% in 2023, after already dropping by 21% in 2022.
On 5 June 2024, Daan launches its campaign with an initial target of €500K, while unofficially aiming for €1M, as its managers Fichet and Ravallec told the media at the end of May20. In its marketing, the company touts what it presents as a blistering start: by 11 June, it announces it has raised €600K in just 24 hours. When the campaign closes on 26 June, Daan has raised a total of €780K from 821 investors.
One crucial piece of information, which retail investors would no doubt have wanted to see front and centre, is quietly buried in the detailed Crowdcube documentation for the offer: the company had been loss-making since 2022, with negative equity of -€1.61M in 2023. This vital information is presented in technical terms in the financial appendices, far from the enthusiastic promotional messages that dominate the campaign’s public communication. The company was therefore under a legal obligation to rebuild its equity within two years, or face dissolution. So this crowdfunding round was as much about saving the company from a critical financial situation as about funding growth.
Or else it was just a way of refilling the company’s coffers by having customers fund a bridge, while waiting for an unlikely miracle investment.
On the company’s side, off the record, I’m assured that the deterioration came later. But how can you believe that? The shareholders’ meeting on the 2022 accounts, held in September 2023, notes that equity is below half of the share capital.
All the more so since this round is based on a pre-money valuation of €6.53M (including the conversion of convertible bonds), a figure at odds with the financial reality of a company whose revenue sits between €6.5 and 7M. A crucial aspect of the deal, revealed in the detailed documentation but barely highlighted in the public communication, concerns the conversion of €491K of convertible bonds issued between August 2023 and January 2024, with discounts ranging from 5% to 20% depending on how long they were held.
The shareholding structure also deserves attention: Antoine Fichet, through his holding company La Réunion SAS, owns 52.74% of the capital, keeping full control over strategic decisions. The new retail investors, despite their number (821), are therefore minority shareholders with little say, as the documentation itself explicitly states.
To justify this valuation, Daan showcases an ambitious expansion plan aiming for €20M in revenue as early as 2025, and announces a new offer for businesses, already naming telecoms group Orange and advertising group Havas among its first clients.
The company sets out three goals for using the funds: accelerating international development (with offices already open in Japan and talks under way for South Korea), funding R&D to develop new products faster (noting that it took “four years for Bob, three years for Joe”), and creating a business unit dedicated to professional customers, with two salespeople, to develop dishwasher rental in France and the Netherlands.
Antoine Fichet also mentions in the business press a major property project, temporarily decoupled from the industrial project: building a new 8,000 m² robotised factory in Montaigu, also in the Vendée, with the planning application to be filed in 2025 and commissioning at the end of 2026 or start of 2027. In the meantime, production of Joe is planned in the current Cugand premises (2,600 m²), with a new line to be installed at the end of 2024.
Except that, in reality, both Joe and Montaigu were already supposed to be funded… by the €6 to 10M deals that were all aborted between 2021 and 2022. So it’s hard to see how this little million could revive those projects while the company is in the red.
Paradoxically, this extremely upbeat communication masks several major risks identified in the detailed documentation for the offer but barely highlighted in the communication aimed at the general public:
Because there is an urgent need to recapitalise: Daan has raised more than €6M in debt, and a major repayment deadline arrives in mid-2025.