Failed Powa Technologies fire sale: Ben White, Greenlight Digital divvy up and buy U.K. assets
By Ingrid Lunden for Techcrunch
One more chapter in the messy story of Powa Technologies, the payments startup that last raised money at a $2.7 billion valuation but rapidly sank into the deadpool on a flimsy raft of vaporware. Today, accounting firm Deloitte announced that it had secured two buyers for two parts of Powa’s U.K. business. Neither of them was Thompson Investments, the firm that was announced as the buyer when Powa first filed for bankruptcy protection in the U.K. in February.
PowaWeb is being sold to Warren Cowan and his digital agency Greenlight Digital. And PowaTag has been sold to a consortium led by Ben White. Deloitte would not comment on the details, but it looks like it is the Ben White who had been a founding partner at VC firm Notion Capital and is himself an entrepreneur, having founded and sold MessageLabs to Symantec.
As part of the deal, some 69 jobs are being transferred to the new organizations. Andy Muldoon will retain his role in heading up the PowaWeb team within Greenlight Digital.
The fate of the non-U.K. parts of the business is still unknown. The company, before it went into administration, employed some 310 people.
Deloitte says it is not disclosing the prices paid for either part of the business, but it was a clear fire sale. It also noted that the release that noted Thompson as the buyer was put out prematurely by Dan Wagner himself before a deal was done.
“Given the precarious financial position of the business, we have had to run an accelerated and focussed M&A process, quickly zeroing in on the key likely purchasers after our recent appointment,” said Rob Harding, Joint Administrator who led on the sale, in a statement.
“We are delighted to have secured a sale for the business preserving a significant number of jobs and wish Ben White, Greenlight Digital and the respective management teams every success in taking the businesses forward… This has been an extremely challenging time for many including the group’s employees and management. We would like to specifically thank them and the legal advisers involved (Hogan Lovells, Linklaters and Akin Gump), for their help and support in successfully concluding the deals.”
The company also ran into some very bizarre conflicts, such as the one involving Square issuing a cease and desist for Powa using Square marketing materials, specifically involving a hand paying with a credit card. And it often made claims that turned out to beless than accurate regarding actual customers.
It was the latter that seemed to get it in the end, with little in the way of incoming revenue to offset the costs of growing an e-commerce business and perhaps even building the products that Powa claimed that it had already built.
Powa Technologies had raised $175 million in its life from investors that included Wellington Management.
Wagner himself has an interesting history, including the sale of an analytics company for $500 million to Thomson Reuters many years ago. It’s perhaps because of this that the emperor was able to convince investors and others that he was wearing a suit after all.