Payfont, the Edinburgh-based cyber-security firm that was last year said to be worth up to £180 million, has collapsed into administration.
Administrator Donald McNaught, restructuring partner at accountancy and business advisory firm Johnston Carmichael, said the move will see all 12 of the company’s staff made redundant.
• READ MORE: Cybersecurity firm Payfont valued at up to £180m
McNaught said that Payfont, founded by chief executive David Lanc – a former senior executive at Royal Bank of Scotland’s cards business – had been trying to raise extra funds to continue trading, but “time ran out”.
Lanc, the company’s main shareholder, said he was “deeply disappointed” about the firm going into voluntary administration, adding: “We are doing this before we run out of working capital.
“My sincere thanks go to the incredible Payfont team who have worked tirelessly to build our world-leading technology. Unfortunately, Payfont, as we know it today, will no longer exist.
If we had been based in Silicon Valley life might be differentDavid Lanc
“We had assembled a highly talented and specialist computer engineering team with sought-after skills. I wish the team well and hope to work with this fantastic band of brothers and sisters again.”
In 2015, the firm secured a £1.2m cash injection, and last year Martin Brassell, the boss of Inngot, a company that specialises in valuing IP, said it could be worth between £106.7m and £180.3m.
Payfont was founded 14 years ago and was developing technology designed to protect users’ digital identities and online data.
McNaught said: “The difficult decision to enter administration was made by the directors when it became clear that ongoing commitments could not be met from available working capital.
“Efforts had been made in the months leading up to administration to raise sufficient capital to allow trading to continue but unfortunately time ran out for that fundraising exercise to be completed successfully. Our objective now is to maximise value for creditors and, ultimately, shareholders.”
IN FULL: DAVID LANC’S STATEMENT
“We are deeply disappointed to announce that the company is going into voluntary administration. We are doing this before we run out of working capital.
“My sincere thanks go to the incredible Payfont team who have worked tirelessly to build our world-leading technology. Unfortunately, Payfont, as we know it today, will no longer exist. We had assembled a highly talented and specialist computer engineering team with sought-after skills. I wish the team well and hope to work with this fantastic band of brothers and sisters again.
“Our technology is not to blame, and remains both world leading and near production. However, we have been unable to secure the next vital round of funding that we require to take our two proprietary and patented technologies, IOMI and ADECA, to market. We wanted to build this exciting technology business here in Scotland and we have received incredible support from world-class cyber security specialists at several UK and overseas universities as far away as China. I’d particularly like to thank Edinburgh Napier University and Prof Bill Buchanan who has been a fabulous advocate and supporter of our technology. Thanks also to Scottish Enterprise for their support.
“As founder, I have spent 14 years working on making the breakthrough in building an ultra-secure people-centric platform that is usable by everyone. We raised over £4.4 million to build Payfont to where it is and I’m grateful to the investors who have supported us up until this point.
“Payfont was on course to deliver its stated business plan but over the last six months we have been distracted by several issues that were not technology related and which led to several personnel changes. Like many potential high-growth technology companies, we require investment to develop our products. I’m sure if we had been based in Silicon Valley life might be different, but being based in Edinburgh, where we want to be, there remains a challenge in funding of high-tech companies that need time to generate global interest.
“The technology we have created remains world class and gives unprecedented levels of digital security for an individual’s digital identities and the privacy of their online data. Industry analysts Gartner agree that Payfont have created cloud-based architecture that is unique and has massive potential for future applications in protecting individuals and organisations.
“This may be an opportunity for technology or venture companies in our space to invest in state of the art cyber security. In particular, the UK’s major banks could benefit greatly from our products, given their drive for consumer centricity and social inclusion.
“ADECA and IOMI are designed from the ground up to comply with the forthcoming GDPR and PSD2 regulations. Our system would give them out of the box compliance today, as soon as implemented.
“Thank you to everyone who have worked with Payfont’s best interest at heart. It’s been amazing to reflect on the goodwill the company receives, even in administration. I will be working hard along with the administrator to find a workable solution to ensure our technology finds fresh financial investment and new supporters.”