UK-based social music startup Crowdmix is entering administration, after failing to secure a new round of funding.
The company soft-launched its app earlier this year but had yet to launch fully, despite a 150-strong headcount.
Business Insider reports that staff were told in a meeting this afternoon that the company will be “winding down after it failed to pay its vendors”, with a planned new round of funding having fallen through.
Music Ally’s sources have confirmed that the news was delivered to Crowdmix staff today, following several weeks of rumours around the financial health of the company, despite past funding rounds totalling more than £14m.
An administration notice has yet to be posted on the company’s website or in the London Gazette.
In April, Crowdmix laid off 8% of its staff in what the company described as a “re-organisation of our marketing department”. Two months later, its CEO Ian Roberts stepped down from his position, amid reports that some staff had not been paid their last month’s wages.
“Crowdmix is currently raising a fourth round of investment which is expected to be completed in the coming days,” claimed a spokesperson at the time when quizzed by Business Insider, which has been covering Crowdmix’s troubles regularly.
Attention will now turn to whether anyone will pick up Crowdmix’s assets – intellectual property included – for an app that was designed to get music lovers creating “crowds” (groups) of likeminded fans to share songs (via YouTube, Spotify and iTunes) and chat.
The app launched in early May for Android and iOS but required an invitation to use it.
In its short history, Crowdmix made waves in the music industry by hiring several high-profile executives, including former Universal Music digital boss Rob Wells.
Financial filings by its parent company Crowdmix Holdings early this year revealed that it had acquired startups Buddybounce and Music Technology Limited to bolster the development of its app.
In February, co-founder and chief product officer Gareth Ingham said that the company’s plans for launch were on track.
“We think we’ve created a great new tool that will generate music streaming: will push people into the streaming platforms and drive them to stream more and share more music,” said Ingham at AIM’s IndieCon conference.
“Ultimately one of the big things we’re trying to do is to create a new revenue stream from social. 50% of all the money that is made on the platform goes back to the artist community.”
Over the coming days, we expect to hear more about how Crowdmix burned through its funding so far, as well as discussion about the business case for this kind of social-music startup more widely.