Powa Technologies, once valued at $2.7bn and seen as a darling of the UK technology scene, said Thompson Investments “is stepping forward to buy” the business, hours after the company went into administration.
Chief executive Dan Wagner said in a statement released late on Friday that the mobile commerce start-up would be acquired by the fund set up by Richard Thompson, the former chairman of Queens Park Rangers football club and Windsor Race Course.
Deloitte, the administrator who had been hired earlier in the day, declined to confirm any sale.
A person familiar with the matter said Mr Wagner released his statement without the knowledge of Deloitte.
Mr Wagner would not disclose the acquisition price or what the sale meant for his 311 staff, saying only: “It’s business as usual.”
Earlier in the day, Mr Wagner sent an email to staff telling them that Wellington Management, a Boston-based fund and its leading investor, had called in loans to the company and forced it into administration.
According to accounts published by Companies House on Wednesday, Wellington had taken out a series of charges against the group and one subsidiary last year. One loan in November required the group’s intellectual and physical assets, as well as a bank account, to be put up as security.
Wellington and investors including Otto Group, the German e-commerce company, had ploughed $175m into the business and supported it with an extra $50m in funding last year.
Wellington said it would not “confirm or elaborate on what we’ve done”.
Powa has been lauded by Prime Minister David Cameron as a leader of the country’s tech scene.
Last December, Tech City UK, the government-backed body that promotes the country’s tech sector, said the company had entered its “Future Fifty list” which honours the “UK’s highest potential digital businesses for rapid, global expansion”.
Mr Wagner had confidently predicted it would become bigger than tech groups such as Google and Alibaba.
Earlier this week, however, the Financial Times revealed that the mobile commerce company had missed payments to staff and suppliers in recent months and started February with just $250,000 in its bank, according to accounts published by Companies House.
Powa had been seeking new funding in recent months.
In his email to staff, Mr Wagner said: “There are a number of options available to us which are being explored. In particular I want to ensure you all get paid.”
The chief executive’s downbeat tone was a stark contrast to an optimistic tone last year. “I’ve forced you to hold out your nerve because I asked you to and I’ve taken you through that, but we’re past that point and now it’s all sunshine and light,” he said in a staff video.
In a meeting with the Financial Times last April, Mr Wagner compared himself to John Rockefeller, the US business magnate who dominated the oil and rail industries in the 19th century. He believed Powa would set down mobile payments infrastructure that would be just as revolutionary.
“What we’re building here is the biggest tech company in living memory,” he said in his offices in Heron Tower, a skyscraper in the heart of the City of London. A person with knowledge of the matter said that Powa could be paying as much as £2.5m a year.
Founded in 2007, Powa initially focused on producing a mobile payments system similar to Square or iZettle, creating a dongle that turned mobile devices into payment card readers.
It later changed tack and created a mobile platform where a phone can be used to scan “PowaTags” — often in the form of digital QR codes — to make a purchase.
Mr Wagner predicted last April that PowaTags would take off by autumn 2015. “It’s a bonfire strategy: we want you to open up a magazine and see PowaTags everywhere,” he said.
By December, however, the group had changed the product’s design again, focusing on a technology that allowed people to buy and order a product by photographing an image of it with their phones. The company did not disclose how many users it had, saying only that Powa app downloads had been in the “low hundred thousands”. It consistently pointed to the number of deals it had signed with retailers and brands as a better reflection of its progress. Powa said it had over 1,000 such agreements, including with companies including Adidas, L’Oréal and Unilever.
Three people familiar with the matter said that these deals were “letters of intent” by companies that had agreed to work with Powa and rarely resulted in up front revenues. In a video message to staff late last year, Mr Wagner described the company as “basically pre-revenue”, referring to a paucity of sales.
“What Dan Wagner was selling was positive PR about him and the company,” said one former employee. “Every time the sales team got a sale, he would announce it and get more investment.”
But Powa was struggling. By January this year, several people familiar with the matter said that the company had again missed payroll. According to a person familiar with the matter, one contractor threatened legal action before being paid three months in backpay.
Powa Technologies Group, the holding company for two operating subsidiaries, is the entity in administration. The two subsidiaries are continuing to operate, said a person familiar with the process.
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