Everledger’s holding company in the United Kingdom is not yet in administration.
‘Difficult and unexpected position’
“The second tranche of funding due to Everledger did not materialise and subsequently we understand that there are external reasons and pressures on this investor which has meant Everledger was placed in a difficult and unexpected position,” Ms Kemp told The Australian Financial Review.
“As the founder and with the full support of the board, we took decisive and swift action to protect the interests of stakeholders.
“One of the tough, but critically important, decisions made was an immediate redundancy of employees and to hold the company in the capable hands of administrators whilst company affairs are finalised.”
She said Everledger was a global business, and that there was a series of complex restructuring events under way, which meant the company in Australia was in voluntary administration and not in liquidation.
Impressive backers
In 2021, the start-up raised $US7 million through a convertible loan, securing $3.5 million from the UK Government’s Future Fund, which was matched by Tencent.
Tencent, the owner of Chinese social media app WeChat, had previously led to the company’s $US20 million series A round in 2020.
In 2018, Everledger closed a $US10.4 million funding round, led by the Canadian arm of Fidelity Investments and GMP Securities. This also had participation from Vickers Ventures Partners, Graphene Venture Capital, and previous investors Rakuten, FPV, Fenbushi, and Bloomberg Beta.
Everledger’s collapse follows other recent start-up closures, including heavily-backed delivery start-up Milkrun, online restaurant marketplace Providoor, and online alcohol retailer BoozeBud.
Ms Kemp said the eight-year-old company had a “fully executed and binding investment agreement” to secure the capital it needed to become profitable.
“I would not suggest Everledger was a ‘cash burning’ start-up,” she said. “Indeed, we planned this investment round as the last external funding round required before profitability.
“Certainly, our use of capital and operational footprint was in total alignment with the board’s direction under a controlled growth plan. This is not a company that scaled too fast or took on venture capital and burnt it in 18 months.”