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Investor gatvol over losing R8.5m to Springleap through ‘misrepresentation’

SA business owner and angel investor Duncan Barratt says he lost R8.5-million to Eran Eyal’s former company Springleap. Eyal, the former CEO of Springleap, faces fraud charges in the US.

Eyal has been charged with allegedly stealing $600,000 from investors by fraudulently soliciting investors to purchase convertible notes through false representations of his company, Springleap. If convicted of the top count charged, he faces up to 15 years in prison.

Barratt (pictured above), who is the CEO of Dairy-Best, was a key angel funder behind Springleap and at one time held a 60% stake in the startup before he parted ways with the company in 2012.

He is co-operating with the New York Attorney General’s office in the investigation into Eyal.

We were so gatvol of the lies and deceit at the time investor says of R8.5-million he lost to Eran Eyal’s Springleap

In a phone call with Ventureburn today he claimed Eyal misrepresented his platform (Springleap) and his offering and information such his customer base and number of subscribers.

“On the back of that I continued to invest more and more money,” he said.

He added that the investments were made on the back of both Eyal and fellow Springleap founder Eric Edelstein’s promises.

Barratt said together with his lawyer, he had many heated arguments with Eyal and Edelstein on his yacht in Cape Town.

A decision was then made in 2o12 in a secret agreement at the time, to spin Springleap out from Evly, and give 100% of Springleap to Eyal. Edelstein would take Evly. Barratt said the agreement was concluded in the dining room of his Camps Bay house.

He said the agreement saw him exit all interest he had in the business and hand it to Eyal.

“We were so gatvol of the lies and deceit at the time,” said Barratt. “We had two businesses we were funding, so we decided the best would be to follow Evly and not Springleap and we didn’t trust Eran (Eyal) at all,” he said.

“He wasn’t coming clean with us on what he was doing with the money,” added Barratt.

Barratt said while he was able to study the business’s financials, it was not clear where all the money he had invested was going to. What were they then spending the money on. “Who knows,” said Barratt.

He would not comment on the nature of any of the interactions he has had with the New York Attorney General’s office.

This is a developing story.

Read more: Springleap charges: Are claims as world’s 7th most innovative firm a fabrication? [Updated]
Read more: SA entrepreneur Eran Eyal charged with fraud in the US over startup Springleap
Read more: Springleap’s Trevor Wolfe talks agencies, startups, and pivots [Q&A]
Read more: Springleap’s new Creatives Insights platform helps brands expand to foreign markets
Read more: Springleap goes big: expands into Middle Eastern, pan-African markets
Read more: SA crowdsource design startup Springleap secures R4m+ Angel round
Read more: Life after t-shirts: Ventureburn gets the exclusive behind Springleap’s pivot

Featured image: SA angel investor Duncan Barratt (Facebook)