While the Gold Coast-headquartered architectural technology company Superdraft may have entered liquidation, the intellectual property (IP) that underpinned its momentum has been salvaged.
Having traded as Superdraft, in-liquidation ArchiX Pty Ltd ran a marketplace linking customers to professionals for renovations and builds, but the technology behind that was owned by a separate entity called ArchiX Holdings Pty Ltd.
Administrators for that entity, Grant Thornton, have today confirmed creditors voted unanimously in favour of a Deed of Company Administration (DOCA) proposed by directors and investors.
"ArchiX Holdings had developed advanced project coordination and digital twin technology that can be used by industry professionals and real estate platforms to coordinate renovations and new builds more efficiently, and so they are delivered on time and on budget," a Grant Thornton spokesperson said.
"The DOCA proposal provides for the recapitalisation of the company so further work could be conducted on adapting the technology, which has been developed over a 10-year period.
"The construction industry has systemic problems in regard to project timeframes and costs blowing out, with more than 50 percent of all construction projects going over time and over budget. The Company’s technology platform helps better coordinate build projects and could play a major role in the digital transformation of the industry."
The DOCA provides for the appointment of a new board of directors and CEO, with a launch of the updated technology platform expected in 2023.
"The company’s administrator, Cameron Crichton of Grant Thornton expects that the DOCA will be executed in the coming week," the firm said.
The case of Superdraft offers a cautionary tale in cost management for fast-growing startups with a high dependency on new capital injections to fuel growth.
In November, co-founder Mark Deacon told Business News Australia the business had hit its peak in March this year with a signed term sheet for $18 million that valued the group at $50 million.
But the company encountered delay after delay in getting that funding boost and a co-investment over the line, and by the time it dawned on Deacon and his fellow co-founder Jake Robinson that they'd need to cut costs to survive, it was too late.
"It was the confidence we had in this investment coming through and the assurance we were given from that fund that resulted in us not scaling back our cost base sooner, as when you are expecting $18M to arrive in the account, you typically don't go and start laying off team members and losing momentum," Deacon said in November.
"In hindsight, we would have not allowed things to run as they were for this long, and negatively impact customers, partners, and staff this much."
Before ArchiX Pty Ltd went into liquidation with $2.16 million owed to creditors and estimated assets worth $77,909, Robinson gave a summary to staff of the events that had led the group to that point.
He noted while a term sheet with the investor concerned had been re-signed with an estimated close date for December, "we could no longer rely on or keep waiting for it".
"We set a new plan which we’ve called the baseline plan which is a plan that places reaching profitability ahead of growth and that requires minimal funding, but this plan still required capital to execute because of our monthly burn rate," he said.
"Equity Investment, especially into early-stage tech companies has come to a standstill this year globally and in Australia, where the private investment market is renowned for being limited, highly conservative and biased towards SaaS companies.…its been nearly impossible for us to raise a round of growth capital for our platform which is a managed marketplace.
"We’ve gone from being in arguably the strongest and most exciting position we have ever been in, seemingly weeks from receiving $18 million-plus in funding and finally being in a position to execute our Series A growth plan, launching V3 of our platform, partnering with REA and others, and watching Superdraft likely becoming a household brand name and then launching an IPO, to now once again battling for our very survival."
He said over the preceding 11 years the two co-founders had dedicated their lives to the business, and their immediate families had as well.
"Every single day we are living, breathing, and thinking about the company and our team, and how we can achieve our vision - the vision shared by you and many of our shareholders, partners and even customers - to positively disrupt the building industry with a scalable digital platform that actually solves the major industry problems."
At the time of publication Deacon had not yet responded to requests for comment on the DOCA approval.
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