Australian tech company Metigy collapses and goes into liquidation owes $32 million

A struggling Australian tech company owing $32 million has gone into liquidation after it failed to negotiate its way out of the mess.

Metigy, which offered an AI platform to small businesses for marketing purposes, went into administration late last month, leaving staff and investors in shock.

But on Friday, creditors voted to wind up the company, with a notice from the Australian Securities and Investments Commission (ASIC) showing that a special resolution had been passed allowing the company to “be wound up voluntarily”.

Its status is currently “in liquidation” as of September 2.

The two appointed administrators, Simon Cathro and Andrew Blundell of Cathro Partners, now act as liquidators of the company.

The administrators had previously recommended that the company be liquidated.

A day before Metigy’s collapse, a damning administrators’ report filed with ASIC alleged that the company had been insolvent for a “significant period of time,” since at least November 14 last year when its CEO and sole director loaned his firm $7.7 million to “complete a personal property deal.”

Last week, ahead of the liquidation proceedings, the corporate regulator, ASIC, also revealed that it was investigating Metigy.

At the time of this writing, the Metigy website was still fully up and running and they said they were still hiring for new positions.

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Metigy made just $61,000 in sales in the last fiscal year, according to the report.

An estimated 75 staff members have lost their jobs due to the company’s demise and are cumulatively owed $2.5 million.

In fact, The Sydney Morning Herald and The Age reported that a whistleblower working at Metigy flagged the situation to investors, ultimately resulting in the company being placed into voluntary administration.

The company’s director has also been put in the spotlight, with administrators placing a warning on two of his properties that essentially freezes them.

He owned a six-bedroom, five-bathroom house in Mosman, on Sydney’s north shore, purchased for $10.5 million in September last year and a property on the south coast of New South Wales with a swimming pool and tennis court, purchased for $7.7 million in November.

However, the decline in home prices means that managers estimate those properties have lost value since their purchases, estimating that there was about $3.7 million in equity in the two homes.

Metigy had planned to raise money at a $1 billion valuation earlier this year as it offered an AI platform that provided customer insights for small business marketing.

But administrators said a number of factors led to the company’s collapse, including “poor strategic management,” “under capitalization and inability to raise additional capital,” “inadequate cash flow or high use of cash,” “trading losses.” ” and “unreasonable management”. related transactions,” his report says. has contacted the now-liquidators for further comment.

Tech companies are struggling across Australia as investors have been spooked by dramatic drops in valuations, making it harder to find funding.

The latest tech outfit to be affected was a Melbourne-based esports startup called Order, which raised $5.3 million in funding last year but collapsed late last month with liquidators looking to urgently sell the business. .

In the month of July, Australia’s first neobank founded in 2017, Volt Bank, went bankrupt and 140 employees lost their jobs, while 6,000 customers were told to urgently withdraw their funds.

Other failed businesses include grocery delivery service Send, which was liquidated at the end of May after the company spent $11 million in eight months to stay afloat, and a Victorian food delivery company called Delivr that billed itself as a rival to UberEats and Deliveroo as well. it collapsed in July when it became unprofitable.

In July, raised questions about another Sydney-based technology company, D365 Group, which makes software for healthcare, real estate and accounting.

Staff claim they have not been paid properly for months and a contractor took the company to court claiming that their debts were not paid. Group D365.

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