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The UK’s biggest startup failures


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Last year, we reported on one of the UK’s biggest startup failures as part of our “startups of yesteryear” series. Enigma Diagnostics had developed a small portable diagnostic kit, which could be used by medical practitioners onsite to reduce diagnosis times. Having raised over £80m in financing, Enigma tumbled into bankruptcy amidst claims of investor malpractice on the part of chief backer Porton Capital. In this post, we list the biggest startup failures in the UK since 2010.

At Beauhurst we classify acquisitions out of administration, and acquisitions of assets, as the “acquired” company going out of business. Generally, these rescue packages only take place when companies have reached a financially unviable position under adverse conditions, and generally constitute an insignificant amount of cash. Where the acquisition terms include relaunching the old company, this is usually done via the creation of a new legal vehicle.

The UK’s biggest startup failures

Blippar Beauhurst
Wonga Beauhurst
Worldstores Beauhurst
Powa Technologies Beauhurst
Aquamarine Power Beauhurst
Enecsys Beauhurst
Songkick Beauhurst

1. Powa Technologies

Powa Technologies Beauhurst

Powa Technologies’ demise should perhaps be viewed as the UK’s biggest startup failure, given just how overvalued and overhyped the company was.

Originally self-proclaimed as one of Britain’s first startup unicorns and a challenger to the hegemony of Silicon Valley, Powa was valued at £1.6b in 2014. Just over a year later, the company went into administration.

Having been hailed as the UK’s leading tech startup by David Cameron, Powa’s subsequent fall sparked a great deal of controversy in the media. Company founder Dan Wagner once confidently predicted the company would be bigger than Google and Alibaba. However, postmortem investigations suggest the company was chronically overvalued, and neared insolvency at several points prior to collapse.

Its main product at the time of death was a payment processing mobile app that could scan QR codes to make a payment. 

If we take the $75m equity transfer Powa used to acquire MPayMe into account, Powa’s total financing amounted to more than £150m. 

2. Blippar

Blippar Beauhurst

Blippar was for a long time Britain’s leading augmented reality and adtech startup. 

Once claiming a valuation of over $1b, and securing over £100m worth of financing, Blippar went under at the end of last year after one of their investors blocked an emergency fundraising.

This company centred around “blipps”, which in their words are “the action of instantaneously converting anything in the real world into an interactive wow experience”. In other words, their mobile app used the mobile phone’s camera to recognise specific products (like a Shazam for physical goods), and then connected the consumers with the relevant brands via an interactive in-phone marketing experience.

Sales peaked at £8m in 2016, before dropping to just £6m the following year, on an operating profit of -£35m. At the end of 2018, the company fell into administration, and a few months later their IP was acquired by Candy Ventures, one of their original backers. Candy are allegedly planning to package these assets into a new venture, also called Blippar, under the helm of original CEO and founder Ambarish Mitra. Other backers included Qualcomm Ventures, the corporate venturing arm of Qualcomm.

Interestingly, Powa Technology’s founder Wagner tried to buy Blippar when it fell into administration.

3. Wonga

Wonga Beauhurst

Probably the least popular company amongst the public on this list is Wonga.

This payday loan company incurred rancour from some parts of the media for its short-term, high-cost loans. Some claimed these were aimed at vulnerable individuals and families. Since 2014 the company has been hit with hefty compensation claims, with a director of the FCA describing the company’s misconduct as “very serious”.

Shortly after securing £10m from a consortium including Accel and Balderton, the company went into administration in August 2018, with 200,000 customers still owing £400m in loans. The company is currently being administered by Grant Thornton, who are conducting “an orderly wind down of the business and sale of the assets and start the process of identifying all creditors, in accordance with their statutory obligations”.

Wonga had raised just under £100m from a range of investors, including Accel, Balderton, Dawn Capital, and Greylock Partners, making it one of the UK’s biggest startup failures. 

4. Enigma Diagnostics

Our analysis of Engima’s eventual fall into administration can be viewed here.

5. Worldstores


Worldstores Beauhurst

Less well known than peers such as MADE, at the start of the 2010s Worldstores was the UK’s leading furniture e-commerce site.

Founded in 2008 during the first days of the Silicon Roundabout, Worldstores managed to survive for 8 years, making it one of the UK’s most successful businesses from this early era of tech startups. It earned a place of several high-growth lists at the start of the 2010s, including the Fast Track’s Tech 100. Despite raising £43.5m in equity finance, the company never managed to turn a profit. At the end of 2016 Worldstores went into administration, and its assets were subsequently acquired by Dunelm, a home furniture industry incumbent, for a paltry £8.5m.

6. Aquamarine Power

Aquamarine Power Beauhurst

Aquamarine Power was once one of the UK’s best funded cleantech startups, securing £53.7m between 2009 and 2014. 

Based in Edinburgh, Aquamarine Power develops and manufactures technology that uses waves to produce electricity. Despite the enthusiasm surrounding its progress and the numerous grants received from the EU and Innovate UK, its valuation peaked at £85.9m following a £17.7m investment in 2011, and successively fell until the firm ceased trading in November 2015. Aquamarine Power cited the economic climate and the lack of private-sector backing as the reason behind its rapid demise.

7. Enecsys


Enecsys Beauhurst

Another cleantech startup failure, Enecsys was a spinout from the University of Cambridge, where the founding team had developed a device designed to promote efficiency in solar panels. 

Enecsys raised £45m in finance before going under, from a range of now defunct investors including Climate Change Capital and Wellington Partners.

8. Songkick


Songkick Beauhurst

One of the original Silicon Roundabout startups, Songkick is a well-known brand to most people who grew up in the 2000s.  

Songkick’s software sifted through different ticket vendors, venue websites and online newspapers to create a database of upcoming events, which users could tailor to their personal tastes. Through the app users could purchase tickets directly from the artists’ websites, allowing for the cut-out of the usual middle-men. Founded by an AI researcher from Cambridge, Songkick constituted one of Sequoia Capital’s first investments in the UK. 

The going was good throughout the early 2010s, with the startup reaching 10 million monthly users in 2014. The company raised £38m through 7 investment rounds , and in 2015 they acquired another ticketing startup, Crowdsurge. However, the company became mired after lodging an antitrust lawsuit against US ticketing giant Ticketmaster in late 2015.

Running out of money, it was forced to sell its app assets to Warner Music in July 2017, and subsequently shut down the rest of its business a few months later, though opting to continue the legal battle in court. Ticketmaster did eventually settle the lawsuit, paying $110m to the company’s owners, and acquiring Songkick’s remaining assets and patents at the start of 2018.

Songkick’s demise was messy but perhaps not entirely of its own doing, in the sense that it seems largely due to a legal suit against a large incumbent accused of corporate espionage. With the $110m settlement going to the company’s owners, the original founders presumably made an exit-worthy amount. Founder Ian Hogarth has since gone on to become an angel investor.