Published: 24.09.2018
As you know from our previous update, we were about to close the round of funding with an investor in Dubai. Unfortunately, we got stuck in a situation we couldn't have anticipated, and the deal did not happen. We used this summer to evaluate the situation and think about what we should do next. Right now, we have a plan and the timing worked out.

But first, I wanted to share with you a detailed story of what happened to us and what we have done because it is only with your support that we can make things happen.

Return from the US without investments.

Back in 2017, I was in the US. For five months, I went looking for investments in Silicon Valley. It was right after the CES, and everything went well at the beginning: I had contacts with multiple venture funds that were ready to invest, I met my future wife, and I thought at the time I was the king of the world.

To cut a long story short, the mix of some unfortunate events and my multiple mistakes led to me returning from the US without any funds raised. I could not believe this fairy tale, that was so close, this fairy tale was shattered. Ecoisme was on the edge of complete failure.

Is there a way out?

In a situation like this, a lot of companies would decide to close. Was I thinking about doing that? Of course! However, if you ever took any responsibility for anything you probably know that quitting is not the path you want to take, you want to look for other options. Even in this situation. And so, I thought I found the way.

In 2016, we were invited to participate in the Dubai Future Accelerators and undertake a pilot project with DEWA. The pilot was scheduled for fall 2017. If the pilot was successful we would receive a bigger contract as well as investments from the local fund. According to the pilot plan, only 50 sensors needed to be installed in properties of different size around Dubai. We had enough funds to produce a small batch of sensors. The pilot looked good on paper. The potential investments would give us an opportunity to launch full-scale manufacturing and ultimately deliver the sensors to you. This plan was like CPR for Ecoisme and so, we decided to go for it.

And we made it!

Our expectations were right. The pilot project went great. We even participated in a few exhibitions in Dubai at the same time and I was invited to join a panel discussion at the most prestigious conference in the Middle East, the World Green Economy Summit 2017! We were on fire!
No one said it was gonna be easy.

Because of the product's complexity and the specifics of working with a very large bureaucratic organization, we were bogged down in legal paperwork the investment fund in Dubai. We focused all our legal forces into untying this paperwork. Things, however, were still moving slowly. The signing off was pushed more than six months forward. In June 2018 we finally agreed on the terms and received all the necessary papers. We signed our copy of the investment agreement and sent it to Dubai for the investor's signature.

Do you know that feeling when your heart is pounding, you can almost feel it beating somewhere behind your eyes and your body is covered with cold sweat? Every CEO can tell you when and why they felt like that. I felt it when the day after approving six-months' worth of paperwork, I received an email from the Dubai investor. Like all these kinds of emails, it was large text, but its message was short: "For reasons, we cannot disclose we won't be participating in the investment round."

"We were crushed" doesn't even begin to describe how we felt. Everything we built over the entire year, our strategy and all our resources, was put into this work and all of it had just been flushed down the toilet.

Are we dead? No, we survived!

We took a week to process what had just happened. We talked to a lot of entrepreneurs. We did research and evaluated all the possible next steps.

We have a plan and we believe this will work. Because of the lack of resources, we lost some of our team members. Team matters a lot when you create a product. Luckily, the core of the team stayed and we have enough workforce to finish the development and manufacturing.

So where are we right now?

We have a loan from KIC InnoEnergy, a grant from the European Bank of Reconstructions and Development and several business angels who committed to invest. In total, it's about half of what we need to launch manufacturing, therefore we decided to use the Syndicate Room platform to raise the amount of funding we are missing. Syndicate Room is a platform that connects ambitious investors with the UK most trailblazing companies. We passed their due diligence with the acceptance rate of just 4%.

The campaign will be launched in October.

Aside from the Syndicate Room, we have managed to achieve the following:

  1. We received the 2nd tranche from KIC InnoEnergy, €50k in total;
  2. A well-connected adviser from the UK, Paul Borrow-Longain, has joined our team. Paul has strong expertise with private and corporate finance and helps us to connect with the right decision-makers in the UK. Thanks to Paul's advice and support, we received a firm commitment from a business angel, negotiated with the Welsh Government regarding R&D and Job Creation grants, and discussed further funding with the Development Bank of Wales, Portman Asset Finance, and UK Export Finance.

I will be honest with you, the last year and a half have been very hard and I am standing on the edge of the opportunity to make everything we have fought for becoming reality. I am, therefore, asking you to believe in me and my team and support me one more time.

The following plans are the most honest timeline I have right now. It is clear until December after which we would need to make new calculations and re-evaluate the situation:

  • We are launching the campaign at Syndicate Room in October. It will last a month and a half.
  • By December we will receive the funding we collect during the campaign and will launch manufacturing.
  • Launching the manufacturing usually takes around five months. Since we do all the preparations to the manufacturing launch now, we're going to reduce it to four months. So we are estimating the sensors being ready for delivery in May 2019.

Why am I doing all this?

The most important person is you, my customer and my user. I will only be calm when you receive the sensor and see how much electricity you are using and how much it really does cost you. When you see and compare your usage with your friends and other households like yours, then I will be calm. When you never forget to turn off your appliances and your wiring can't catch fire because of any overload.

I believe we are creating a great company whose products will improve your life and at the same time make the planet cleaner.

Ivan Pasichnyk, Ecoisme CEO