Powa play: Dan Wagner ready for legal battle with former director Ben White over collapse of fintech unicorn
With its multi-billion-dollar valuation, plush Heron Tower headquarters and outspoken founder, British fintech “unicorn” Powa was billed as Britain’s answer to Google – until, in February this year, it sensationally collapsed into administration.
Now Morning Wire can reveal the collapse is set to trigger a bloody courtroom battle as two of the story’s protagonists go head to head, fighting it out over a Chinese deal that founder Dan Wagner believes could have made Powa a serious contender on the global tech stage.
Wagner has told Morning Wire he and a group of shareholders are preparing a lawsuit against one of Powa’s biggest investors and one of its former directors, to be launched “within weeks”.
Wagner, a seasoned tech entrepreneur who counts Dialog and Venda among his previous startups, accuses a former director of Powa of colluding with its largest investor to force Powa into administration.
He said Ben White and US-based Wellington Management planned to buy Powa’s assets out of administration and put them into their own holding company in an effort to capitalise from the completion of a landmark deal in China.
Read more: Death of a unicorn – inside one of the biggest startup failures of all time
However, it is understood White, who was on the board of Powa for just four weeks, has launched his own lawsuit against Wagner.
The lawsuit seeks to enforce a personal guarantee by Wagner against a $3m investment White made in December 2015, as other investors, who Wagner claimed to have lined up, waited for the Chinese deal to complete.
The deal, originally signed in August with China UnionPay, a payments giant often likened to Visa, meant PowaTag, Powa’s technology, would be placed into as many as 400,000 Chinese retail locations in the first 12 months. PowaTag allowed users to point their phones at an advert and be taken straight to an online store.
Read more: Goldman said Powa was on path to a $50bn valuation before its collapse
But it took longer than expected for the Chinese government to give the venture the go-ahead, meaning Powa required a bridging loan from White. Wagner says over the ensuing weeks White worked with Wellington, to whom a $60m loan was due at the end of December, to bring down the company for their own gain.
“We created value that engendered a desire to migrate that value over to characters who tried to take it for themselves,” Wagner told Morning Wire
Meanwhile, Deloitte’s administrator’s report, published in mid-April, suggested the deal was more complicated for Powa than originally thought. “PowaTag required modification for the Chinese market and significant work was undertaken to try to meet the delivery date in January 2016, which never happened,” it said.
A spokesperson for White said: “We have nothing further to add on Powa’s failure that hasn’t already been covered extensively by the media. We strongly refute Dan Wagner’s version of events, where he continues to blame everyone but himself for the collapse of Powa, his story is wholly inconsistent with the administration reports published by Deloitte.”
Wellington did not respond to requests for comment.