VC-backed cryptocurrency startup Zwoop has gone into administration.
According to an exclusive report by The Telegraph’s James Cook, the company’s board of directors filed for administration at the end of November last year.
As a result, employees and suppliers from all over the world have been left with unpaid wages and bills, according to sources.
Zwoop, founded by Italian entrepreneur Alessandro Gadotti, raised $13 million from Robert Friedland, an American-Canadian billionaire and mining tycoon. Friedland is also the founder of Ivanhoe Capital Corporation (a key stakeholder in Zwoop) and Ivanhoe Mines, a Canadian public company listed on the New York NASDAQ and Toronto stock exchanges.
According to its LinkedIn page, Zwoop was developing a “revolutionary, e-commerce assistant that will transform how the world shops online.” It sought to leverage blockchain technology, artificial intelligence, deep machine learning, computer vision, and natural language processing to help consumers find the best possible prices.
The company reportedly employed 56 people spread out across London, Singapore, and Hong Kong.
According to sources, the startup’s collapse is thought to have resulted in unpaid bills totaling several hundred thousands pounds.
Specifically, one London-based marketing agency is thought to be owed $53,858 (£42,000), while a public relations firm has been left with an unpaid bill of $38,470 (£30,000).
A canceled ICO
Like many startups in the cryptocurrency space, Zwoop announced plans to launch an initial coin offering (ICO) in early August. At the time, the company said in a tweet that the pre-sale would be going live on August 28th with the public sale scheduled to take place on September 25th.
A week before the ICO was due to go public, on September 18th, Zwoop announced the sale was “currently suspended until further notice due to updated legal opinion”, seemingly providing further details in a now-defunct blog post.
Important Pre-Sale Update: Zwoop’s ICO is currently suspended until further notice due to updated legal opinion. Find out more here: https://t.co/lpIFlRHdhf or ask any questions on our Telegram channel: https://t.co/0YmS3Iyd8k #ICO #announcement #presale pic.twitter.com/sNMF79XcLJ
— Zwoop (@ZwoopGlobal) September 18, 2018
Zwoop had reportedly intended to raise an additional $30 million by selling its ZWP tokens. The money would be used to boost app development and for a significant advertising campaign in the UK. The company was also planning to expand its workforce in London, open an office in the capital, and to hold its global app launch in the UK.
Employees and freelancers were initially concerned about the slow pace of development of Zwoop’s app. Gadotti is thought to have surprised workers when he announced that the app would be released in a month, despite employees’ concerns that it wasn’t ready.
“There is no technology that launches when it’s perfect,” Gadotti is quoted as saying.
Gadotti, also the former APA CEO of Powa Technologies (which collapsed in 2016), quit after the ICO was canceled.
Following the abrupt cancellation of the ICO, an employee reviewed the company‘s accounts and found $2 million worth of payments which couldn’t be accounted for.
Zwoop employees and Ivanhoe Capital are thought to have confronted Gadotti shortly after, with the founder denying that he misused any of the startup‘s money. He claimed the disputed amount could be attributed to legitimate payments.
Hard Fork contacted Ivanhoe Capital’s London office for comment but no reply had been received by press time.
Get the TNW newsletter
Get the most important tech news in your inbox each week.Follow @thenextweb