ONLY A FEW weeks ago, the sale of the firm behind mouldable glue Sugru was announced – news that would normally be celebrated in any business.
But with thousands of investors who poured their money into the firm in two crowdfunding campaigns left out of pocket, the move was bittersweet for the company’s Irish co-founder, Jane ní Dhulchaointigh.
The UK-based business was launched in 2004 and raised a total of £5 million through Crowdcube.
Those investors lost up to 90% of their money when a deal was struck to sell the company, FormFormForm, which was valued at £27 million during its fundraising three years ago, for around €8.6 million.
It’s a fact that Ní Dhulchaointigh could shy away from talking about, but she hasn’t.
“There is no getting away from the fact it was not a success financially in terms of an investment, and that will always be a disappointment,” she told Fora.
“The timing isn’t what we planned, we would have hoped to be in a stronger position to get the value we would have wanted from a merger or acquisition, but that’s how it turned out.
“I still think it was valid for us to invest in an independent strategy. We didn’t manage to realise the value for our investors that we wanted, but had things played out a bit differently maybe we could have.”
Ní Dhulchaointigh said the goal was to eventually sell the company, but the move was expedited due to a debt financing deal from Scotland’s Clydesdale and Yorkshire Bank falling through last year.
The eventual buyer was German adhesive manufacturer Tesa, but she said other firms were also interested.
“It has been a challenging time and process, but Tesa definitely represent a lot of possibility for the future of Sugru, expanding into new markets and driving the awareness of the product through advertising. It’s going to be exciting.
“We went through an M&A process with all the potential inquirers in our industry. The consumer adhesive industry is quite a small one, there are between five and 10 large companies in the world that dominate.
“We had built relationships with all those companies and discussed various forms of partnership. So when it came to finding the right buyer for the company, all of them were considered, approached and discussions were held at various levels.”
She added that Tesa was the best “strategic fit” due to many other factors, including the time in which the acquisition deal could be completed.
“They are willing to invest what would be needed to grow the company to get the product out there to the level it deserves. For them, they’re very excited about the product. We haven’t expanded into Europe at all yet, and that’s Tesa’s primary market.
“So they will be able to launch it there will a full rollout supported by television advertising and then a global rollout to follow into its 50 affiliates, which will sell the products in other markets.”
Angry investors
Some investors who lost out as a result of the deal have been vocal in their complaints about the sale.
But Ní Dhulchaointigh, who is staying on at the company as managing director, said a number of investors and fans of Sugru have also been in touch to express support.
“When you have 4,800 investors, people are going to respond very differently. The overwhelming response is one of disappointment. All of us would have wanted a better financial outcome.
“Naturally there are going to be some people who are less happy than others and more vocal, but we have always done our very best by everybody and tried to get the best outcome for all the stakeholders.
“However, it is humbling just how many of our supporters remain supportive and remain believers.”
Future
Ní Dhulchaointigh said she was busy working with Tesa on joint projects that would be launched before the end of the year, and that process meant it was difficult to get perspective on the circumstances that led up to the sale.
“We’re really in the middle of something and it’s really hard to get a distance to talk about what we might have done differently. I think it’s something I will be better placed to think about in a few months time having managed through the transition.”
Also on the horizon for Ní Dhulchaointigh is the European Inventor Awards in Paris next week, when the company is vying for a prize from the European Patent Office (EPO).
FormFormForm has scooped numerous awards over the years, placing ahead of the iPad in Time magazine’s list of the best 50 inventions released in 2010.
Ní Dhulchaointigh said it’s an honour to be nominated for awards, but her mind is firmly fixed on the future of the company.
“My role as the leader in this business is to stay focused and help us all keep moving and growing. We’ve had a very challenging few months. There is no denying that. It has been very difficult professionally and personally.
“When you have 70 employees and millions of people out in the world who will use Sugru, and when you have a community who are very vocal in telling us how useful our product is, then we need to keep working to get it into the hands of more people.
“It’s our job now to focus on the future and for our investors who we weren’t able to give a return to, we must honour their investment and make it the success that they believed in.”
Written by Killian Woods and posted on Fora.ie
To embed this post, copy the code below on your site
have your say