Aussie company GigSuper collapses leaving $2.7m in debt

Hundreds were left scrambling to see if they money was safe, yet the company launched a crowd-funding campaign after it knew it was in trouble.

A company that aimed to tackle “anger” when it came to superannuation has collapsed owing $2.7 million to unsecured creditors, as well as $200,000 to employees.

Yet GigSuper, which had 500 members, launched a crowd-funding campaign just two weeks after it was warned the fund would close in early 2022, according to the Australian Financial Review.

It had already raised almost $3 million from 300 shareholders over the last four years.

The fund was officially launched back in 2019 for self employed Australians and encouraged members to make super contributions by offering a fee-free savings account and an accumulation account.

But administrators were appointed to GigSuper on December 10 after concerns it rejected an offer from a rival super fund to buy its assets and was facing running out of cash.

Members were notified on Christmas Eve last year that the fund would be closed by the end of January, but email addresses weren’t hidden.

As a result GigSuper members contacted each other airing concerns they were having trouble withdrawing money from their GigSuper bank accounts, while others were worried they had lost money investing.

GigSuper has collapsed owing $2.7 million to unsecured creditors, while all staff were sacked in November. Picture: GigSuper

One GigSuper member told the email chain they had invested in the crowd-funding shares but guessed they had “just lost all that money”.

“How can you have taken money from people like that only such a short while ago and then just fold?” the person wrote in the email chain according to the AFR.

However, members savings account were frozen when administrators were appointed and this was the reason they were prevented from being able to withdraw their savings. Their money is now in the process of being returned.

Co-founder of GigSuper, Peter Stanhope, had told The Sydney Morning Herald back in 2019 that the self employed were angry about their ability to build a retirement pot when the system was geared towards rewarding regular contributions, which wasn’t always possible in their line of work.

“There are two overwhelming feelings that come across. One is jealousy. Then there’s a real anger of ‘I’ve worked so hard all my life, but someone as a traditional employee has this great big retirement balance’. There’s an awful lot of anxiety,” he said at the time.

GigSuper co-founder Peter Stanhope. Picture: gigSuper/YouTube

GigSuper co-founders Martin Batur. Picture: GigSuper/YouTube

However, GigSuper’s collapse has seen it with just $50,000 in the bank with millions owed to unsecured creditors, as well as a debt of $133,000 to the tax office, according to the AFR, but the superannuation money has been secured.

Close to $4 million in superannuation savings had been moved to other funds as requested by members or deposited into the tax office’s lost super accounts.

Back in July 2021, GigSuper announced it was looking to raise $1.5 million and had a goal of attracting 60,000 members in five years.

According to an administrator’s report by DW Advisory principal Paul Weston, Diversa Trustees which was in charge of GigSuper, told the fund’s directors on October 8 that the super fund would close in the first half of 2022, due to a lack of scale.

Administrators noted the company was “well advanced” in a process to raise capital when they were appointed. Picture: Getty Images

Meanwhile, all employees were fired in November.

However, a crowd-funding campaign for GigSuper was announced by the Birchal platform on October 26 seeking expressions of interest with Stanhope telling potential investors that the business had more than doubled in 12 months and they were raising funds to continue scaling growth.

But the campaign never went ahead with the last capital raised by the fund on 20 September last year.

The administrator’s report also noted that GigSuper was “well advanced in a capital raise process” when it was appointed in December.

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Originally published as Aussie company GigSuper collapses leaving $2.7m in debt