Firstly, it is important to remember that, as with all projects listed on the DEX or Exchange, it is imperative that communication is perfectly controlled to avoid any form of information asymmetry that could be damaging to the project. That’s why some people in the community were saying that we weren’t communicating enough, but sometimes it’s necessary to give time to the different strategic options before communicating a statement fairly.
Cashburn, Revenue & Fundraising
Money is the nerve centre of any business. And I won’t surprise anyone by saying that a company needs cash to operate and pay its teams.Retreeb’s cost structure (team & operational expenses) was (±) $100K/month in Q2. Of course it hasn’t been this high in the past, but it has averaged $70K/month since Sept 2021. We have obviously increased investment in the product in 2023/2024, but also the payrolls. In a company in general, but also in a start-up, the salary mass undergoes a mechanical inflation, in view of the talent that comes to complete the team and the career plan of the OGs according to their seniority.
At the same time, payment is all about execution (product) and volume (flow). Our product is excellent (functionally speaking) and perfectly calibrated to address its market. Our volume is certainly promising ($500K processed) but still insignificant compared with the main players in the market. And despite our initial successes in the field, a 0.6% (2/3 of 0.9%) margin on $500K only generates $3K in revenue.
As I’ve already told the group, we raised a total of $2.3m from our private and public sale investors in May and September 2021. They are also the ones who helped finance this incredible project. But Retreeb was unable to take advantage of the extraordinary bullrun in 2021 to build up a war chest. Only a few per cent of the reserve supply was unlocked at that time, and we have always had a very strict policy on the sale of tokens on the secondary market. We only sold when there was a significant rise. Unfortunately, the market just collapsed in on itself from Q2 2022 onwards.
To ensure our development and financing, our objective was to raise conventional equity capital from VCs capable of supporting us through the next stages.So over the last 12 months we’ve been meeting more and more VCs (both crypto and traditional). I had personally recruited an international VC-compatible Co-CEO to help us with this task. To be comfortable, we needed to raise between $2m and $3m by March 2024. Raising equity capital from VCs when you have previously financed yourself via alternative leverage is far from easy. VCs like you to respect the rounds (SEED > SA > SB > etc.) and we don’t fit into their google sheet. Finally, by the end of Q1 we had undertaken due diligence with a leading fund and had 3 commitments from follower funds for our project. This due diligence lasted 3 months until the end of Q2, during which we provided all the answers to the requests we received.
At the same time, the bullish traction on BTC at the start of 2024 and the ATH in March gave us renewed hope that Bullrun would arrive soon afterwards. So we put the gas back into the web3 part of the project, preparing and then deploying our Impact Defi BU, preparing a major new listing on Bybit, activating a large number of influencers and launching our Impact Launchpad Dapp.
Unfortunately, the Bullrun did not come and despite a nice X4 on $Treeb at the beginning of Q2, the market dumped the alts. At the beginning of June, without any explanation, the lead VC in the current fundraising pulled out of the deal and cancelled the operation.Perhaps the fragile economic context and/or the political instability in France are to blame. We don’t know exactly, but we do know that finding a new deal in the middle of summer is impossible. And to complete the picture, Bybit has stopped replying to us (see communication on Telegram) despite our efforts to meet their requirements.
Personally, I think it’s hard to illustrate Murphy’s Law better than this sequence…
Summer & team
At the start of the summer the situation was critical, our cashburn was financially unsustainable and we had only 2 options before us:
1- Dump millions of tokens to extract a little cash and try to get through the summer to find a (hypothetical) new deal in September.
2- drastically reduce the company’s costs to preserve the technology and buy time to find new financial solutions in September (VC or Bullrun).
It was a very difficult choice but I opted for the 2nd option.
The summer was particularly difficult because we had to organise the departure of 80% of the team and reduce our cost structure by 90%.
We then concentrated on redesigning processes and preserving technical assets. Unfortunately, in this kind of situation, the marketing team was the main victim of these budget cuts. This also explains the lack of marketing activity in recent weeks.
The team is obviously very saddened by this situation. Firstly for the exceptional project to which it has dedicated itself for the past 3 years, and secondly because it too had high hopes for its personal token’s bag. None of them have been able to take any effective advantage of their token capital. As a reminder, the team only held 10% of its allocation at the last bullrun and it too was subject to strict selling guidelines.
Next step
Our cost structure has now stabilised for a few months and we have re-launched discussions on a number of fronts (joint venture, VCs, merger, etc.). We are also looking at industrial partnership opportunities with other crypto/fintech players.
The technical assets have been preserved, but we are no longer in a position to communicate or market on a large scale. Nor will there be a new batch of projects on the Impact Launchpad until viable financing solutions become available.
I believe that we have systematically tried to do what we said we would do and that we have launched a huge number of products (4 apps, Dapp, website, shop, Pluggin, Blog, etc.). That’s the paradox of this market. When we hadn’t yet done anything we reached $180m in market cap and with everything we’ve achieved 3 years later we’ve barely passed $3m in market cap. Finally, even if the disappointment of not being financially supported is huge, I’m still very proud of everything we’ve produced so far. But for the moment, we’re in hibernation, waiting for a solution to come along.
Of course, our interfaces and the smartcontracts on the staking platform and Impact Launchpad will continue to work as normal for withdrawals.
We are well aware that such an announcement will lead to a spiral of dumping. To avoid the remaining liquidity evaporating and the first readers of this article dumping the token with all the available liquidity, we will have withdrawn the liquidity deployed just before the publication of this article.
Moreover, the fact that this has not happened before proves that all the holders (large and small) are in a symmetry of information and that, despite the difficulties, Retreeb has not dumped hundreds of millions of tokens on the backs of its community.
This liquidity will be redeployed in the event of a viable solution and tangible Bullrun.
Conclusion
I know that this announcement is going to create a lot of anxiety and disappointment, but I think that by now you can reasonably understand why it’s complex to communicate in a hurry over this period. Talking too quickly would have aggravated the situation by creating a collapse in the token and cutting off a potential financing option for the project.
I’m under no obligation to reveal all these details, but perhaps readers/entrepreneurs will learn something about the challenges of entrepreneurship and its harsh realities...
Of course, I also made a lot of mistakes. We should have financed ourselves with a VC as early as 2022 to complete our financing and enter their circuit at our prime. We should also have benefited much more from Bullrun 2021. I made some strategic choices that could/should have been different, but as we say in France: With ‘ If ’ you could bottle Paris.
And believe me, you don’t put 6 years of your life into a project without wanting its success with all your heart. But you never play the same game over and over again, so you have to continue in a different way and try different paths, hoping that Murphy’s law will change.
Sincerly Jérémi Lepetit
CEO retreeb
