- Augmented reality firm Blippar, one of the UK's best-funded startups, is close to collapse.
- According to The Sunday Times, its chairman has written to shareholders warning of a dispute between two investors.
- Malaysian sovereign wealth fund Khazanah has reportedly blocked property tycoon Nick Candy from injecting further funding into Blippar.
- There have been months of red flags, with Blippar trying to sell itself earlier this year, internal dissatisfaction, and public accounts showing losses.
- Now, insolvency firm David Rubin and Partners has been lined up as administrators.
- Blippar could live another day if Candy, already a major shareholder, can inject further cash into the company.
Hyped augmented reality startup Blippar is reportedly close to collapse, thanks to an impasse between two of its major investors.
According to The Sunday Times, Blippar's chairman David Currie told investors on Friday that Malaysian sovereign wealth fund Khazanah had blocked an emergency fundraise, and that the company had no choice but to begin insolvency proceedings. Accountants David Rubin and Partners have been lined up as administrators, the Times said.
According to the report, Khazanah has blocked funding from another major Blippar shareholder, property tycoon Nick Candy. Candy earned a board seat on Blippar earlier this year after participating in a prior $37 million (£28 million) funding round.
The firm may stave off collapse if Candy, who has funded and acquired other British startups with mixed success, injects further funding. Companies House filings show that Nick Candy's investment vehicle, Candy Ventures, owns at least 28% of Blippar.
Blippar has been hyped up as a unicorn startup worth more than $1 billion, having raised £79 million ($100 million) in funding. The company created an augmented reality app that recognizes objects placed in front of it, and predominantly relied on ad campaigns and brand partnerships for revenue. It was founded by UK entrepreneurs Ambarish Mitra, Omar Tayeb, Jessica Butcher, and Steve Spencer.
Its valuation is in question and its position has been precarious for more than a year.
Employees told Business Insider last April that the firm would likely run out of money at some stage during 2018, thanks to its high cash burn and expensive investments in overseas technology talent. They also criticized the company's ever-changing strategy.
Although Blippar denied that it was in financial trouble, the company had earlier laid off a chunk of sales staff, and went on to shutter offices in Japan, Turkey, and California.
Towards the end of 2017, the company began seeking a buyer. According to insiders close to the company, Snap CEO Evan Spiegel visited Blippar's California office in December and considered an offer of around $200 million (£151 million). The other serious buyer floated by the leadership was SAP, the sources said.
After a deal failed to materialise, Blippar closed its California office and let go of its US staff, numbering around 35 jobs. Even then there were signs of financial trouble, since Blippar was more than two weeks late in paying staff.
Accounts show that Blippar lost more than £34 million ($45 million) for the year to 31 March 2017, blaming its heavy losses on technology investments. The company lost its long-time chief financial officer, Andrew Graham, in June, and its chief operating officer, Danny Lopez, after two years.
There have been other missteps. The Financial Times discovered that Blippar's CEO and cofounder, Ambarish Mitra, had exaggerated parts of his backstory. And Business Insider discovered that a Blippar-produced app designed to mash up people's faces with those of celebrities was populated with images of murderers, dictators, and terrorists.