It's not all unicorns and funding rounds, here are the startups that were wound-up in 2019 and caught our attention.
Hundreds of startups fail every year for a whole variety of reasons, from last-minute funding falling through to legal action or just a failure to generate revenue.
Many manage to quietly wind their businesses up, while others explode, suddenly leaving staff out of pocket and investors angry.
In the world of fintech and alternative finance these are the firms that entered administration during 2019 and drew our attention.
Launched straight out of university by founder Ollie Purdue, Loot was a digital banking service aimed at solving financial problems for students.
Unfortunately after building up a strategic stake in the startup, RBS decided against buying the entire business leaving Loot’s 200,000 Millenial and student customers to head elsewhere for their digital banking as the company quickly collapsed.
In an age increasingly dominated by two major UK digital banks, it was refreshing to see this niche yet prominent fintech startup offering up an alternative.
However Lendy’s dramatic successes hid growing problems within the company including a loan book full of defaults and, months after being authorised by the FCA, the company fell into administration in May.
Now, over six months later, some 9,000 retail investors are still waiting to hear how much of their £150m invested can be rescued by administrators.
A little-known “blockchain-powered freelancer firm” called Nodal Labs made headlines in March after reportedly signing a £250m contract with a major recruiter.
However, by September an AltFi investigation would cast doubt over the company’s technology, while revealing a string of missed payrolls for employees and contractors.
Staff tried to save the business, attempting to wrestle the company away from its management team, however the move was unsuccessful and Nodel entered administration in October.
For some startups entering administration in 2019 was merely a bump in the road. These are the fintechs that failed, albeit briefly, before being rescued, and today continue to trade.
It was later discovered that the administration had been triggered as part of a hostile takeover attempt by a Singaporean consortium.
Glint’s management team led by CEO Jason Cozens were able to narrowly avoid losing control of the company after securing an emergency £5.7m cash injection to pay off their creditors and rescue Glint from administration.
Ipagoo, founded in 2015 by former Goldman Sachs Asset Management director Carlos Sanchez, provided cash management, debit cards and cross-border payment services for customers and banks in real-time.
The company found itself fast-tracked into administration in August after the FCA ordered it to stop all regulated activities.
The regulator’s decision was not fully explained, however reports indicated that it was due to concerns that Ipagoo was potentially under-capitalised.
Ipagoo’s time in administration was relatively short-lived as after appointing FRP Advisory on 2 August the administrator reported the sale of the business on 30 August to Chairman Financial.