Corporate recovery experts this week warned that dot.com companies face a new round of casualties as vital investment dries up.
Partner Gary Squires at Kroll Buchler Phillips said a change in sentiment among venture capitalists and investors could spell the end of many dot.com companies spending at ‘burn rate’ to survive and in need of new funds.
This week Squires was called in to sort out troubled dot.com Cubic Egg, the company behind the e-partment store cubicworld.com. Kroll partners last week were also appointed as liquidators to e-commerce venture Adabra.
Squires said: ‘Cubic Egg is typical of many on-line companies which raised money on start up intending to float, but which find the second round funding is less forthcoming.’
Former PricewaterhouseCoopers accountants FD Jim Weir and development director Gavin Rankin were among the founding directors who set up Cubic Egg in 1998 and invested £2m in developing the online department store which went live in April.
Squires added that a wave of consolidation now loomed over the business-to-customer sector, with online projects facing takeover. Kroll last week was also appointed liquidator to Adabra, the community shopping website set up last year to give customers an on-line shopping portal to pool their purchasing power and buy at wholesale discount rates.
Liquidators Lee Manning and Andy Stoneman, both partners at Kroll, have sold the company’s asset and customer contracts for #220,000 to French owned Uniondream.
Adabra had built some high-profile contracts with web portal Altavista and internet service provider Lineone. In February it struck a retail partnership with Egg, the online financial service provider.
Lee Manning said: ‘Venture capital investors pulled out in reaction to falls of internet stocks on Techmark and Nasdaq markets when approached for further funding.’
Just one half of UK practices have implemented a pricing structure around auto enrolment implementation and advice - with many suffering increased costs
Deloitte's north-west Europe foray; BDO, Smith & Williamson investment paths; Shelley Stock Hutter; and Wilkins Kennedy discussed by editor Kevin Reed on our Friday Afternoon Live broadcast
Accountants should alter their perspective on auto-enrolment to maximise business opportunities, according to Eric Clapton.
Kevin Reed discusses whether new accountancy group Cogital can rival the Big Four...and its likely direction of travel