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Finance

Could Powa be the first of many Unicorns to become Unicorpses?

There’s long been talk of a tech bubble, and in recent months, warnings of unicorpses – Unicorns that go bust – appearing. Has the end of the good times begun?

The FT is reporting that Powa Technologies – a London-based fintech startup with a valuation of $2.7 billion – has gone into administration and shed at least 74 of its 90 UK-based staff, plus potentially more worldwide. Deloitte is overseeing the sale of the company’s assets.

Powa was founded in 2007, one of over 200 “Unicorn” startups worldwide valued at $1 billion-plus, and boasted companies such as Argos, Adidas and L'Oreal as customers. It’s collapse wasn’t entirely out of the blue however, as the company had recently been in the news for failing to meet payment deadlines for staff salaries and contractors, and was reported to have debts totalling £11.5 million ($16 million) and just £175,000 ($240,000) in the bank.

Could Powa be the beginning of a collapsing house of cards?

There’s been talk of a tech bubble for a few years now, and fears that a list of Unicorns will become a pile of Unicorpses has been growing.

Who else could go under? Dropbox and Evernote – two companies often described as merely features not products – are both seen to be struggling and have been retiring certain products in order to streamline, while MedTech startup Theranos – valued at $9 billion – is coming under significant strain of late.

Powa might be a blip on an otherwise strong field, but I wouldn’t bet on it.

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Dan Swinhoe

Dan is a journalist at CSO Online. Previously he was Senior Staff Writer at IDG Connect.

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