Socio Local Ltd, a social media marketing venture that ran up €3m in losses in its first five years of trading, has called in Process Advisor Conor Noone to try and rescue the company.

The Baker Tilly accountant has been appointed under the Scarp small company rescue scheme.

Socio Local founder Stephen Malone (32) was previously a director of Mobeo Ltd, which offered a service called Jibbr and was placed in liquidation in June 2018.

Socio Local developed a digital marketing platform for retailers and hospitality businesses which aims to take the hassle out of organising social media engagement.

Since its inception in December 2016, Socio Local Ltd has raised €2,150,000 in equity investment.

In Association with

The accounts filing for 2021 discloses that the company is also funded with a €410,000 convertible loan note with an interest coupon of 8%.

Total liabilities in December 2021 amounted to €1,280,000 and current assets were €274,000. The tax liability at period-end was €272,000 and trade creditors were owed €161,000.

Socio Local Ltd booked a loss of €305,000 in 2021, bringing accumulated losses to €3m. The company's negative net worth at period end was €998,000.

The main equity investor is venture capital firm Tribal Ventures.

Under the Scarp process, the Process Advisor engages with creditors and prepares a rescue plan. The rescue plan must satisfy the ‘best interest of creditors’ test and provide each creditor with a better outcome than a liquidation. In addition no creditor may be unfairly prejudiced by the plan.

Creditors are invited to vote on the rescue plan by day 42 of the Process Advisor’s appointment.

The rescue plan is approved without the requirement for court approval provided that a majority in value of an impaired class of creditors vote in favour of the proposal and no creditor raises an objection to the plan within the 21-day cooling off period which follows the vote.

Where one class of impaired creditor votes in favour of the plan, this decision can then be imposed on all classes of creditors.

Where an objection to the rescue plan is raised, there is an automatic obligation on the company to seek the court’s approval.

Theya Lingerie and Packed House are other SMEs that have gone down the Scarp route recently.

In a 2021 interview with the Business Post, Stephen Malone told Elaine O’Regan: “From day one with Socio I put a tonne of processes in place whereby we track everything from sales to finance and customer support.

“We know what’s happening every minute of every day and we keep a constant eye on our unit economics.

“I also went back to the investors who lost money on Jibbr offering to cut them in on Socio, so I could get their money back to them. Some actually decided to invest again despite that first experience.

“That has taught me a huge amount about resilience and just getting back up again and doing your best after you’ve been knocked down.”