Powa Technologies, the London tech unicorn that collapsed into administration at the end of last month, received an emergency loan from its biggest investor the day administrators took over the company.
Documents filed with Companies House show Wellington Management agreed to make a loan through two Bermuda and Cayman Island subsidiaries to Powa on February 19, 2016, the day Deloitte were appointed as administrators. The size of the loan is not clear.
The February 19 loan document makes clear that the loan was made only
after Deloitte was appointed. Powa is listed as “in administration” and all correspondences with Powa are directed to Richard Harding and Nicholas Edwards, the Deloitte administrators.
The purpose of the loan is not made clear but it is likely that it is to keep the business running while Deloitte looks for a buyer. Powa had just $250,000 (£177,700) in the bank at the start of February and debts of $16.4 million (£11.6 million).
We’ve reached out to Wellington Management for comment and will update when we hear back. We’ve also contacted Deloitte for comment and will update when we hear back.
Powa’s collapse was reportedly hastened by Wellington calling in previous loans, according to reports in the Financial Times. Wellington made a separate loan to Powa in November. The size of that loan is also unclear, although Powa’s accounts show it raised a total of $50 million (£35.5 million) last year. Wellington has invested over $150 million (£106 million) in Powa since 2013.
Despite once been valued at $2.7 billion (£1.8 billion) and raising at least $225 million (£160 million) in debt and equity since 2013, Powa’s CEO and founder Dan Wagner told staff that the company was “basically pre-revenue,” according to a recent video seen by the Financial Times. Deloitte fired 74 out of 311 of Powa’s worldwide staff shortly after being appointed in a bid to reduce costs.
Business Insider reported that most of the 1,200 partners Powa claimed to have signed up to its payments app had simply expressed interest in the technology and not signed any contracts or agreements.
Powa has three main business lines: PowaWeb, which built online shops for retailers; PowaPOS, formerly known as mPowa, which built a mobile card reader to rival the likes of Square; and PowaTag, an app the would let consumers buy things by scanning QR code, print adverts, and audio of TV ads.
Business Insider understands that Deloitte is in advanced talks with potential buyers of some or all of the business.
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