Business News Digital

Crowdmix overheads topped £2 million a month before administration, and not even Patsy Palmer could save it

By | Published on Friday 16 September 2016


Further evidence for those who believe that Crowdmix was some kind of genius avante garde comedy project now. An administrators’ report about the collapsed start-up reveals that, not only was the firm spending £2 million a month earlier this year despite never properly launching its product, but ‘Eastenders’ actress Patsy Palmer was brought in as a last ditch attempt to save the company. Which explains all her mysterious tweets about the service.

Business Insider reports that the bulk of Crowdmix’s mega outgoings were staff costs, which topped £1 million per month for 160 employees. Rent on its office, meanwhile, came to more than £1 million per year. And all the while the company never quite got round to launching its ‘social media for music’ app and so therefore had no revenues whatsoever. An invite-only version of Crowdmix was put live on Apple’s App Store in May, but had only attracted 2000 users by the time the company went bust.

Having tapped up various big hitters in the City for the £15 million of investment that got the venture to its little-used beta phase, a final funding round to raise another £20 million fell through in June, leading to the administration. According to The Evening Standard, a last ditch effort to save the company involved drafting in former ‘Eastenders’ actress Patsy Palmer to rally celebrity friends to invest.

Palmer, it turns out, is a neighbour in LA of former Universal Music exec Rob Wells, who joined the company in 2015, and she apparently “had surprisingly good contacts”. Though not sufficiently surprising to stop the company going under.

Crowdmix was bought out of administration in August by its main backer, property tycoon Nick Candy, who apparently still hopes to get the whole flim flam off the ground. He agreed to pay £6.75 million for it, documents show, though the final sale figure was £675,000, after being offset against debts the company already owed him. Two other offers for the company (or parts of it) were rejected.