The collapse of UK mobile payment provider Powa Technologies on Friday is a "classic curse-of-mobile story", according to an analyst.
Powa was snapped up by an investment vehicle headed by former QPR chairman Richard Thompson on Friday, just hours after Deloitte was appointed as administrator for the firm, which was once complimented by David Cameron.
Having once apparently been valued at $2.75bn (£1.95bn) – making it one of the few UK "unicorn" private tech firms worth more than $1bn – Powa had burned through $175m of investment since its creation in 2007.
Analyst Megabuyte said Powa was a "classic curse-of-mobile story, reflecting an over-ambitious and costly land grab, minimal end-user spend, and considerable PR spin".
"Powa's strategic error appears to have been to launch a land grab when there was no land of any value to acquire," the analyst said. "Mobile money represents a potentially significant opportunity, but one growing much slower than many of its proponents have forecast, while areas such as mPOS and mobile commerce are being competed for by multiple businesses."
Megabute noted that fellow British online payment services firm Monitise – which spun off from reseller Morse in 2007 – had also been forced to retrench.
Rival market watcher TechMarketView noted that Powa's technology centres on its PowaTag system, which allows shoppers to make a purchase by photographing a product on their mobile phone, which it said operates in a "notoriously competitive" sector.
"This high-profile, high-overhead and (in our opinion) low-margin strategy looks to have failed spectacularly and the management team – and the new owners – will have to find a new approach to enable Powa to realise some of its earlier potential," said TechMarketView research director Peter Roe.
In a statement on Friday, Richard Thompson described PowerTag as "extremely exciting" and said he had "great faith in the future of the business".
Powa CEO Dan Wagner added that his firm has found in Thompson a "committed investor who... understands the needs of the current business".
"Myself and my senior management team would like to reassure all customers and partners that we continue to trade as normal and they will be unaffected by the current restructuring," he said.
News that Powa was gearing up to appoint Deloitte as its administrator was first broken by Sky News.
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