Pooja, the grown up of misjudgment

In the startup environment, it is a habit to talk about successes to keep our hopes alive for the future, but it is a big mistake to forget the failures of the past and not benefit from the experiences of the past. For this purpose, the Ecomotive team has collected the experiences of a series of failed startups, so that reviewing their failed stories may be a basis for the success of new startups in Iran’s startup community. This collection will be published and made available to the audience in the form of the story of failure. We review the 21st part of this series, which deals with the failure of Powa Technologies.

Powa Technologies is an e-commerce and mobile commerce company founded in 2007 by Dan Wagner; The English entrepreneur was founded in London and started its activity as a subsidiary of SuperCom Ltd. The company offered technologies to merge the physical and digital worlds, including PowaTag, PowaWeb, PowaPos, PowaPIN, and a mobile app that enabled payments and coded existing marketing media such as billboards, printed materials, and advertisements. Makes it digital.

The company has attracted the largest Series A funding for a tech startup, raising $76 million in August 2013. In June 2014, Powa acquired Hong Kong company MPayME and its ZNAP technology. Following this action, Wagner claimed that Puva is worth as much as 2.6 billion dollars. Pua also partnered with Iconnect pos to distribute its products in suitable packaging. The company charged sellers 40 cents, or 10 basis points, for each completed transaction, bringing in about $4.9 million to $5.9 million a year in revenue. But this income was not enough.

Unfortunately, there were many bugs in the company’s products, which limited the company in attracting many sellers and then generating income and meeting financial obligations. On the other hand, Wagner’s extravagances in renting expensive offices and organizing expensive parties were also added to the cause.

These events caused the company to face financial problems until the beginning of 2016 and stop paying the salaries of its employees and contract parties. Its Hong Kong office also failed to pay its employees on time. Powa gradually lost its liquidity and faced heavy debt. To get rid of this situation, the company did everything to attract the attention of investors.

In February of the same year, the investment company Wellington Management, which was Powa’s largest investor and creditor, demanded the settlement of its loan.

January 28, 2016 Alessandro Gadotti trying to rebuild the company, He became the CEO of PowaTag. During his management, he became the temporary CEO of the group to support the work and sales process of the companies of this group. On February 23 of the same year, Pova made 74 employees redundant in its London office, and the next day filed for bankruptcy, laying off most of its employees.

On 2 March 2016, Sky News announced that Powa’s two main divisions, PowaWeb and PowaTag, had been sold in separate transactions.

After the collapse of Powa, the Financial Times questioned some of the company’s past claims in several articles. For example, by examining the company’s claim of 2.6 billion dollars in 2014, it turned out that this figure was around 106 million dollars. On the other hand, the claim of a 10-year contract with the Chinese company UnionPay – whose cooperation with a small English company was strange – was denied by the Chinese giant.