Mobile commerce technology startup, Powa Technologies has been placed into administration, putting over 300 jobs at risks.
The company, founded by industry veteran Dan Wagner has appointed Deloitte to oversee the sale of the business.
You may not have directly heard of Powa Technologies, but it’s technology is used by numerous household names such as Argos and Laura Ashley to make it easier for consumers to pay for items on a mobile phone. The PowaTag app allows smartphone owners to snap a barcode and then automatically be taken to the checkout.
The Powa Technologies Group also provides e-commerce and point of sale software to retailers, although its primary focus is mobile commerce. The company bought the Hong Kong based MPayMe mobile payment app for $75 million back in 2014 (before re-branding to Powa Technologies), in the same year that the app had revenues of just £120.
Once valued at a staggering $2.7 billion, Powa Technologies UK Limited had just $250,000 left in the bank at the start of February according to records at Companies House.
Considering its raised over $175 million in funding to date, Powa Technologies has been ploughing through the money with its purchase of MPayMe and staffing costs. It’s now at a point where it only has enough cash to keep going for a couple of weeks.
It’s not unusual for startup companies to have huge valuations pre-revenue. Instagram is a great example of this and Facebook clearly found it attractive enough to stump up $1 billion. Facebook has been able to deliver strong returns from investors from it’s focus on mobile advertising and it’s likely Facebook will be able to do the same with Instagram.
Unfortuantely, Powa Technologies didn’t make it to a public share listing, resulting in a lack of funding which has caused it to call in administrators. What isn’t clear, however, is whether with more funding the company could have made a return for investors or if the company has run its cause.
Mobile payment solutions is a hugely competitive industry and at the time of writing, the future of Powa Technologies and the app is unknown. No doubt investors will be hoping that other tech firms see enough value in the intellectual property it has to buy out all of the company or some of its assets.