I have written several times recently about how we are helping our community during the Covid-19 crisis and what we are seeing more broadly in the ecosystem. Now I want to share an update on what Seedrs is doing as a company in order to preserve our strength through this period and drive growth on the other side of it.
Having raised money late last year, we have a substantial amount of cash in the bank, and we have a further committed facility from our institutional investors. We are, however, a loss-making company, because alongside funding our day-to-day operations, we have been investing heavily in medium and long-term growth initiatives that do not yet generate significant revenue. Like many businesses in our position, we are always looking to strike the right balance between pursuing these longer-term initiatives to accelerate growth versus maintaining our cash pile.
So far, we have not seen a material impact from Covid-19 on our business. Our revenues in March exceeded our expectations, and while we saw a decline in platform activity in the first week or so after the scale of the crisis in the UK became apparent, in the past week we appear to have ticked back to roughly normal levels. Nevertheless, we are very sensitive to the realities of what uncertainties may lie ahead, and conservatively we need to assume that our Q2, and possibly Q3, revenues will not be as robust as we would have expected.
We therefore think it is right to alter the balance for now by (1) focusing on work that provides short-term value to our entrepreneurs and investors, (2) temporarily spending less on longer-term growth initiatives than we had planned, in order to therefore (3) maintain our cash so that we have the reserves needed in case the Covid-19 crisis gets materially worse, or lasts materially longer, than expected. To do so, we are taking the following actions:
- We are re-prioritising our product roadmap to focus entirely on features and developments that we believe can add value to our users in the next few months. Our larger and/or longer-term projects will be on hold for the time being.
- We are cutting out much of our external spending on software and services that, while valuable to us in the future, add no or limited value to our operations or users today.
- We are asking a limited number of our employees to go on temporary furlough, with those in the UK being paid under the government’s Coronavirus Job Retention Scheme. These are all highly valued members of our team, but the nature of their work is such that, in their absence, we can still provide our full set of services to our entrepreneurs and investors without any reduction in quality. We are grateful to everyone who has agreed to go on furlough, and we look forward to welcoming all of them back as soon as possible.
- As a show of support for all of this, our Executive Team salary costs are being cut by over 25%, and other team members who are not going on furlough are being asked to take a temporary 10% salary cut. Again, we are grateful to everyone who is willing to make this accommodation.
No one starts a business because they want to do things more slowly than planned. Like most founders, I was looking forward to 2020 as a year of strong growth and huge accomplishments, and I am sorry to be reining things in. But the realities of Covid-19 mean that we have to adapt, and I believe the measures we’re taking are the right ones to ensure that we maintain our strength as a business no matter what comes over the next months, and that we return to our ambitious growth and expansion strategy as soon as we reach the other side.