A startup grocery delivery company is launching a new crowdfunding campaign after an earlier one was cancelled amid plagiarism concerns.
Grocemania’s push for £100k was pulled by Crowdcube after concerns were raised that elements of it including a video script had been copied from another grocery delivery business on the same site.
Now a new funding round is set to be launched on Seedrs.com from 11 June, according to Askar Bulegenov, co-founder and MD of Surrey and west London-based Grocemania.
The first campaign was launched in April but pulled a week later after Bristol-based grocery delivery business Good Sixty raised concerns with Crowdcube that Grocemania’s promotional video script was a “90% word-for-word copy” of its own. Good Sixty also sent a ‘cease and desist’ notice to Grocemania.
The campaign was removed by Crowdcube despite Grocemania submitting a new video.
Bulegenov admitted “rewards” offered as additional incentives for investors, such as discount on orders for six months, were also copied from Good Sixty’s page, though he said the exact wording was changed.
“It was the same rewards, same discount for six months and so on. We were short on time. We’d been submitting our pitch for two weeks and the last day they told us now you need to write rewards and that was the same day when we saw Good Sixty on Crowdcube,” he said, adding: “I admit this was my mistake.”
Chris Edwards, co-founder and MD of Good Sixty, said: “Grocemania came up on the Crowdcube app and I thought, great, a bit of competition. It shows there’s demand.
“Then unfortunately we saw the video and the initial one was unfortunately a word-for-word copy of our scripted video. We estimate it was about 90% copied. So of course we flagged it up to Crowdcube.”
Edwards added: “We’re not trying to take over. It’s just respecting our hard work and we didn’t really want a word-for-word copy and basic plagiarism. So we did a cease and desist which they agreed to.”
A Crowdcube spokesman said: “Unfortunately the business did not adhere to our terms and conditions and as a result, in the interest of investors, we were unable to facilitate their round.”
Like the earlier one, the new funding round to be launched on Seedrs will seek £100k for 13.3% of equity, putting a value of £650k on Grocemania, which has been delivering for shops in Surrey since last year.
The business’s model is to focus on independent grocers and deliver with a £2.50 charge while charging stores 10% commission on orders. Orders are placed on Grocemania’s website and delivered in under an hour within a three-mile radius of stores. The minimum order is £10.
The business also delivers for branches of Tesco and Londis, where the model has to be changed, with mark-ups on shelf prices instead of the 10% commission payable by retailers, Bulegenov said.
Areas currently served include Kingston upon Thames, New Malden, Teddington, Barnes and Twickenham. Ten shops are listed on Grocemania’s website including a butcher, fishmonger and delicatessen, along with a Tesco, Londis and Budgens.
“In the past three months we have taken 927 orders and currently are doing 12 to 17 orders a day,” said Bulegenov.
He said the profit was between £7 and £8 per order, adding: “And now we go in towards Wimbledon, Clapham, so central London.”
New grocery partners will get the first month commission free, he said.