EXCLUSIVE: DriveTribe, the motoring social network founded by The Grand Tour team and with investment from Elisabeth Murdoch and Disney, has warned that it could run out of cash unless it can mount a sustained recovery from the coronavirus pandemic.
DriveTribe was launched by Jeremy Clarkson, Richard Hammond, James May, and Andy Wilman in November 2016 as an online community for car fanatics, with investment from 21st Century Fox (now owned by Disney) and early Facebook backer Jim Breyer. Murdoch invested £2.5M ($3.3M) in the business last year.
In its annual report, DriveTribe said that in a worst-case scenario, in which advertising revenue continues to be ravaged by Covid-19, its cash reserves of £2.2M will not be sufficient “to continue trading for a period significantly longer” than 12 months. The company added that it has no agreement in place with shareholders for additional funding, despite informal indications that more cash could be made available.
DriveTribe’s earnings were signed-off in October after it was “hit hard” by the ad market crash in spring, according to chief executive Jonathan Morris. Since then, Morris said the market has rallied and advertisers are committing to longer-term deals, but he warned that it’s “too early to call” how the business will cope with continued coronavirus uncertainty in 2021. “We’re certainly not in any trouble or dire straights at this moment,” he told Deadline. “I’m not as gloomy as the annual report suggests.”
Morris said DriveTribe’s position as a mid-market digital player, with up to 140M monthly users on social media and its website, means it has not been as vulnerable to the pandemic as some bigger and smaller companies. DriveTribe had hoped to be profitable this year, but for obvious reasons has pushed this ambition into 2021. Focus is turning to building other non-advertising revenue streams, including e-commerce and helping streamers grow communities around shows.
DriveTribe’s annual report showed its revenue grew 80% to £1.8M in 2019, while it cut its losses by a third to £3.5M. The company has 35 members of staff and a wage bill of nearly £2.9M. It raised a further £2.5M of funding in January.
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