This was the year that one tech start-up company was meant to deliver. Its founder had, after all, said that it would be bigger than Google or Facebook.
Instead, Powa Technologies collapsed into administration last month.
It had launched on the stock market with a valuation of over £694m and last year founder Dan Wagner said it was worth £1.9bn.
Investors poured huge amounts of money – over $200m – into the failed venture.
Powa, a fintech company rather than a proptech one, is now the subject of an interesting report by the BBC’s technology correspondent Rory Cellan-Jones.
In it, he warns of the “wisdom of sky-high valuations for unproven businesses”.
As recently as last October, Wagner told Evan Davis on Radio 4’s Bottom Line that the business had been valued at $2.7bn by its main backers, Wellington Management.
Evan suggested that was a meaningless figure because Powa hadn’t made any money yet.
“We’re a growth tech business,” Wagner replied, maintaining it was other people who had set that value.
It was Wellington Management that finally pulled the plug. It politely declined to explain to Rory Cellan-Jones about the due diligence it had done before pumping in so much investment.
As we say, this was a fintech (financial) company and not a proptech (property) one.
But it’s certainly an interesting story of hype and the over-valuation of a tech company that made no money.
That’s the sort of story that could ruin your breakfast if you’ve over blagged the disruption you’re gonna cause.
The worse bit must be explaining to friends, family and staff that all the publicity, all the promises all the everything was just a very loud shouty sham.
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“The worse bit must be explaining to friends, family and staff that all the publicity, all the promises all the everything was just a very loud shouty lie“. Fixed that for you Robert 😉
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The fintech equivalent of Purple Bricks perhaps???
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first of many…………………….
remind me please, what’s that big grey thing with flappy ears sat in the corner????
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It is the purple elephant in the room and the other unsustainable Internet agents dependent on TV advertising for business.
Their market is going to get overcrowded so now of them will be able to afford TV ads.
Should be interesting to watch. Not one to invest in.
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I see PB shares are on their way south again.
I nearly fell off my chair when I saw them 50% above initial offer.
As the old saying 100% of S0d all equals S0d All.
LOL
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What muppets invest in a person whose own Wiki page states “He is best known for his leadership of Dialog and its subsequent 95% share price drop in 2000”.
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Is the Emperor in his all together?
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Absolutely… totally… and his subjects are all wearing ‘La-La ears’ to the shouts and laughter from those that can see his winky… ;o)
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