Superdraft director reveals what happened to cause company’s collapse

Liquidators have been appointed to a Gold Coast company pitched as the building industry’s answer to Uber, with a director saying it hit a ‘perfect storm’ of problems. Here’s what went wrong.

A DIRECTOR of a Gold Coast company which has collapsed, claiming about 80 jobs, says it was caught in a “perfect storm” of financial factors affecting the tech and building industries.

Liquidators were appointed last month to Varsity Lakes-based Superdraft, a tech firm which aimed to become the ‘Uber’ of the construction industry by linking property owners with designers and builders.

The company was founded in 2011 by Jake Robinson, with co-director Mark Deacon joining two years later.

Mr Deacon said Superdraft had co-ordinated about 10,000 projects around Australia with a build value of $2 billion, but had endured a “challenging few months” due to the “drying up” of capital for investment in tech firms and issues in the building industry.

“We got hit with a multitude of things all culminating at the same time. It was a bit of a perfect storm,” Mr Deacon said.

“Being an early stage tech venture we were focusing on high growth, building out and developing innovative technology and that is a very expensive exercise.

“Therefore we did rely upon consistent capital to help fuel that growth and development.

“The investment markets in tech ventures this year have really dried up. It’s kind of like you’re in a rocket ship going to the moon, you’re on your way there and halfway the fuel stops.

“We got impacted by that, which many tech ventures in Australia and across the world are facing right now, resulting in a lot of tech companies having massive lay-offs.”

Superdraft directors Jake Robinson and Mark Deacon using visual reality goggles at Varsity Lakes in July 2016. Picture: Mike Batterham.

Mr Deacon said the collapse had been swift, with the company still on a growth trajectory as recently as March.

However he said a promised $18 million investment was postponed, while interest rate rises had caused some customers to cancel projects.

“We had a whole bunch of things come together at the wrong time,” Mr Deacon said.

“We made a number of moves in the last few months and we started the process of reducing our costs but we left it too late and didn’t act quickly enough.

Superdraft's Jake Robinson and Mark Deacon.

“It’s only back in March we were peaking in terms of sales revenue, growth and development. Everything was peaking, our teams were growing, we had the signed terms sheet there.

“We were planning to expand globally to the US, everything was going really smoothly and then obviously within a six-month period it collapsed really quickly.

“The interest rates going up obviously impacted on our revenue and cash flow and combine that then with the investment markets and private equity markets drying up.

“We spoke with our lawyers and we spoke with the administrators and felt like it was the right decision to make, to put the company into administration to avoid any further impact.”

Cameron Crichton and Michael McCann of Grant Thornton were appointed liquidators to the company on October 31.

A first meeting of creditors, who are believed to be owed more than $2 million, was held last week.

The Bulletin has contacted the liquidators for comment.

Follow @keithjwoods

Originally published as Superdraft director reveals what happened to cause company’s collapse