In this update I would like to go though our current situation.
I understand that everyone has been waiting for new information, and I’m sorry for the delays. I will try to explain the situation as clearly as I can, without giving away information that we have not yet been cleared to share. We have 2 investors.
We have signed our investment contracts, and are waiting for the first payment from the investors. These have been delayed a few times due to minor reasons, but we have been informed that the payment should be wired to us by the end of next week. The scope of the investment covers both— existing orders, and future Eve projects. We have made preparations to have everything in place to move quickly once the money arrives.
We currently have most of the devices assembled and our manufacturer is waiting for the balance payment, to ship them out. Manufacturer has been working on the assembly since we shared the investment contract with them and finalized the inventory audit. Given the delays, the manufacturer is eager to move quickly. The moment we receive payment from our investor, we will get the OEM Windows licences, finish the assembly of remaining devices, package the devices, transfer them to HK warehouse, and ship them out. Based on our experience it can take 2-4 weeks.
Assembled V’s in one of the storage rooms waiting for injection of Windows licence.
- Some of you are concerned that our estimates for both updates and order fulfillment haven’t been accurate. This is understandably very annoying, especially for those who are still waiting for your device or a warranty replacement. Shipping estimates on the website and newsletters have been based on the investment situation and amount of funds frozen. Our shipping estimator hasn’t been always accurate, but it has always been based on what we know, what we see and what we have been told.
We are ready to move super fast the moment it happens. The only thing we are waiting for is an actual wire transfer.
As for the investors we have 2 parties investing in Eve. One is a big manufacturing company whose expertise is in production and fulfillment, the other is a private investor from Europe. During the year we had a lot of meetings with these investors and we are very confident in our choice and see a lot of synergies in the co-operation.
The manufacturing company, sees a lot of value in the way we operate, and they want to help us with production and fulfillment, while we take care of product development and sales. Unfortunately, I cannot disclose the name of this company as such openness with the community is unusual for them as a private company. They are quite strict about their publicity. This is a big league company working with big brands like Aple, Xiaomi, etc.
The private investor has done a lot of business in China and really believes in our approach of no-middle man sales and crowd development. We are excited to have this investor on board.
Before we got the investment agreement signed we could not risk disclosing more information on where we stand in the investment process.
Frequent questions answered
I would like to address some of the concerns that community has voiced regarding our business decisions and practices. I’ll do it in Q&A format:
Q: How did you end up in this situation?
V hit the sales in December. Some of the customer funds were frozen at payment processor and the other part was released to us.
We used the funds available to make down payments to our vendors. As we are a startup vendors want to see at least a 50% down-payment. Some would insist 70%. We were also required to place deposits to vendors for a certain quantity forecast.
We were able to ship out a good amount of devices, as payment vendors kept the withheld amount relatively low.
After shipping devices, we received more of the frozen funds back, allowing us to ship more devices.
After seeing that our total sales numbers are high, our payment processors decided to increase the amount of frozen funds to cover their risk -> This reduced the amount of the devices we could ship -> Community became unhappy because of the delays and some customers started a charge-back -> In response to the charge-backs, payment vendors further increased amount of the frozen funds. Cycle went on and on. The more customer unrest, the more funds frozen, the less shipments made.
We agreed with our vendors to get devices shipped in substantially lower quantities to get some funds unfrozen.
Suppliers become concerned as they would like to ship out the inventory sooner and place deposits for future quantities. We do keep manufacturers updated on the investment process in the meantime.
We had a lot of investor meetings. Some of them seemed to be almost at the end, but we did not get the investors to sign the investment agreement as at the last moment one of the parties saw something as a deal breaker.
As mentioned earlier, shipping estimates on the website and newsletters have been based on the investment situation and amount of funds frozen. Our shipping estimator hasn’t always been accurate, but it has always been based on what we know, what we see and what we have been told. The reason shipping estimates kept moving is because either the amount of funds frozen would get higher or investment timeline would get extended.
Today, we are finally in a situation in which we have the investment agreement signed and are receiving the amount of funds needed to our bank account in a matter of time.
Q: What options did you have?
The situation was: Our funds are either frozen or are at our supplier bank accounts as down-payments or deposits. Minimum amount of funds from before are kept at account to run operations.
Based on the situation we decided to do everything possible to get all the devices shipped out. We focused on finding the investor to get the situation resolved, ship devices, and refund customers. Funds for refunds are available by either using an investment or new sales. This solution means that people waiting for V get V, people waiting for refund get refund, and support continues. We learn from mistakes and never end up in this situation again.
The other option was to stop operations—refund a few customers and explain that we can’t arrange more refunds as the money is at our Chinese suppliers who have the down payments and deposits. Vendors wouldn’t agree to return funds to us for refund simply because there is no gain from this. What it would mean is that very few customers would get refunds and some of the customers would get the device. Funds are at our vendors and payment processors. The only way for customers to try to get them is from them directly. People owning a V wouldn’t have updates and future support.
Naturally, we decided to go with the first option
Because we had a very reasonable prospects of getting an investor and we did in the end.
Q: Why do you keep your sales open?
- Investor asked us not to stop sales. We have a road map with our investor to deliver so V will continue.
- We can fulfill the current web store orders at the same time as the rest of orders
- We disabled PayPal and CreditCard as a payment option to avoid frozen funds situation
- We did stop sales mid-July and it resulted in increased customer unrest and refunds as people thought we are stopping business.
Q: Eve does not care anymore.
A: We do.
Actions speak louder than words. We are fully committed to acting!
Q: I called my credit card company and they said they are not withholding/ freezing funds.
A: Credit card company or bank does not withhold the funds. It is the payment processor that does. In the picture below, Cybersource is a payment processor. It’s pretty complex process to explain. You can read more on it online.
Q: When is the next update?
Next Thursday or Friday