Slated by TV gurus, now Cabtivate folds

The Edinburgh-based company paid taxi drivers to put television screens in their vehicles and aimed to generate funds from selling advertising.

Co-founder Mark Greenhalgh, himself a former taxi driver, appeared before the Dragon's Den team in 2005 trying to sell a 10 per cent stake for 100,000.

In a self-confessed awkward performance, Greenhalgh was rounded on by fellow-Scot Duncan Bannatyne, and sent away with no funding.

When the show was screened, Greenhalgh claimed to have had the last laugh, after he said investors had ploughed 100,000 into the business after it was filmed.

However, liquidators, who were appointed on Friday, confirmed yesterday that initial estimates were that the company had left debts of "at least several hundred thousand pounds".

Eight staff have been laid off, and Cabtivate has already ceased trading. Company documents showed two directors had resigned in the last month.

Ken Pattullo, a partner at corporate recovery specialist Begbies Traynor, warned that, after an initial overview of the company finances he believed it was "highly unlikely" any creditors would receive a dividend.

Because of the number of private taxis Cabtivate worked with, it is believed many creditors are owed relatively small amounts of money.

As well as installing television screens, Cabtivate also operated an external advertising business, sticking company logos to the outside of vehicles.

Pattullo said the company appeared to have had cash flow and funding difficulties, leading the directors to petition the courts to appoint liquidators.

"They'd spend a lot of money developing the system," he said. "The company has been in financial difficulties for some time and it is now our job to investigate the company's affairs."

A meeting of creditors must be held within three months to appoint a liquidator.

As recently as November, Cabtivate was in bullish mood, announcing an expansion into the massive London market which Greenhalgh predicted would take turnover beyond 3.4 million.

Greenhalgh, who founded the company in 2003 with Jim Neilson, described the first few years of the business as "very successful" late last year.

First marketing the concept in Edinburgh, it was later rolled out to other UK cities including Glasgow, Manchester and Bristol.

The concept was formed from Greenhalgh's belief that cabbies were being unfairly treated in terms of advertising revenue.

In an interview with The Scotsman last June, he said the company wanted to sell the concept overseas and said he aimed to float within three years.

Its accounts for the year to 31 March, 2006, showed an asset deficit of 375,000, an increase of 230,000 on a year earlier.