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The Aussie tech players caught up in Guvera’s demise

The Aussie tech players caught up in Guvera’s demise

Millions owed to IT services providers

Credit: Dreamstime

As the Australian Securities and Investment Commission (ASIC) reportedly embarks on an investigation of failed local music streaming start-up, Guvera, the collapse of the company has left a handful of tech players out of pocket by hundreds of thousands of dollars.

The music streaming company was placed into liquidation on 28 April after a failed tilt at a $100 million initial public offering (IPO) on the Australian Securities Exchange (ASX) in June last year.

The public float would have valued the company at around $1.3 billion, yet at the time, it was reported that the company had made a mere $1.2 million in the 2015 financial year.

This could be one of the reasons why Atlassian co-founder, Mike Cannon-Brookes, reportedly tweeted at the time that he was “terrified” by the prospectus, citing “no revenues”, “little growth” and “dodgy loans”.

“ASX shouldn’t allow this,” he tweeted in early June last year, according to Fairfax Media.

And the ASX didn’t allow it. In a rare move, the exchange blocked the proposed float, rejecting the IPO offer, and effectively forcing the company into administration.

It is understood that the failed IPO prompted some serious questions from private investors and shareholders in the company whom, it has been reported, had cumulatively pumped more than $180 million into the company.

The company ceased operation in May, according to the ABC, following the appointment of Deloitte as its liquidator. Deloitte had previously been appointed as Guvera’s administrator, in June 2016, following the start-up’s failed IPO attempt.

Now, although ASIC is yet to provide public details about its investigation, a spokesperson for the Australian corporate regulator told ARN that it is, “taking a close and active interest in matters to do with the fundraising of Guvera and associated matters”.

While early investors are likely still wondering where their millions went, many of the company’s suppliers are also, no doubt, wondering whether they will receive the full amount owed to them after the company entered liquidation in April.

According to documents lodged with ASIC, Guvera claims more than 100 creditors, some of them providers of IT and technology services; some of them local IT services providers, others global tech players.

According to the minutes of a creditors’ meeting held on 28 April, Guvera owes its creditors just over $4.9 million.

Among the exhaustive list of creditors are several local IT players, including Adelaide-based software development firm, NextFaze which is owed $462,615, according to documents filed by liquidators.

Also on the list of creditors is Pure Hacking, and Australian penetration testing and information technology security consultancy, which is owed $66,137, according to the documents.

At the same time, a few global tech companies also appeared on the list, with Amazon Web Services (AWS) owed more than $500,000.

Meanwhile, Facebook Australia and Facebook Ireland are owed a cumulative total of more than $1 million, according to the documents.

While Deloitte continues its efforts to recoup cash for investors and other creditors, it remains to be seen just how many cents in the dollar suppliers will ultimately receive.

According to the latest information to creditors from Deloitte, unpaid employee superannuation has been paid to the Australian Taxation Office (ATO).

The investigation continues.

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Tags Facebookit servicesASXAmazon Web ServicesASICliquidationguveraAWS

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