Nick Candy, the property tycoon who invested almost £10 million in failed startup Crowdmix, described the company’s former CEO as “delusional” about its £120 million valuation in the High Court on Monday.
Candy was giving evidence in the unrelated £132 million legal battle he is fighting with his brother, Christian Candy, against their former friend Mark Holyoake. Holyoake has accused the pair of blackmail, extortion, and threats in relation to a property deal turned sour. The Candys deny the allegations.
Candy talked about his 2015 investment in music startup Crowdmix while under cross-examination from Holyoake’s barrister, Roger Stewart.
He said Crowdmix had wanted to raise funds in 2016 at a valuation of £120-£130 million, “when there [was] no product, there [was] no revenue, the cashflow [burn rate] was over 2 million — I think it was £2.5 million a month.”
He added that then-CEO Ian Roberts “was delusional” to try and raise funding at that valuation.
“It is one of the worst deals I have ever done. I have lost £9.25 million from it,” he said. Candy had invested through his company Candy Capital.
Ian Roberts had appeared earlier in the trial to give evidence in support of Mark Holyoake. Roberts claimed he saw similarities between Nick Candy’s alleged behaviour towards Holyoake, and his alleged pattern of behaviour as a Crowdmix investor. During his evidence, he said Candy had pressured him to hand over his shares in the startup in exchange for funding.
On Monday, Candy denied this in court. He said:
“We did speak about those shares … but it was not a condition of more money coming in. What we were trying to do is get the company into a shape where it had new equity coming in, not just from Candy Capital, Candy Capital were willing to put some more money in and were by far the largest shareholder of this company — well, not the largest shareholder, we had put the most amount of money in but in terms of shareholding, my Lord, we had not got a huge shareholding so we asked them to take some of the pain with us by giving us some of their shares.”
He added that he had injected £750,000 into Crowdmix just before it went into administration.
“[If] you think that being unfair is someone investing £750,000 two weeks before a company goes into administration, I would love to have those people around me every day because I think I was more than generous and more than kind,” he said.
Ian Roberts left Crowdmix last May, leaving cofounder Gareth Ingham to take control of the business. Crowdmix went into administration in the summer, and Nick Candy eventually acquired the bulk of the company.
He told the court that Candy Capital had “not decided what we want to do with Crowdmix.”
He also revealed that Gareth Ingham had been in touch “recently” about the company.
“Gareth Ingham reached out to say could he do something with it and take some profit from it. And we haven’t returned his call and got back to him yet because we have not decided what we want to do with Crowdmix,” he said.
The case continues.
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