Crowdmix Declares Bankruptcy; 130 Jobs In Jeopardy

Breaking: Music Startup Crowdmix Declares Bankruptcy; 130 Jobs In Jeopardy
  • Save

Crowdmix is going to the bad place.

Crowdmix, the social music startup which boasts offices in London and Los Angeles, has informed its current 130 employees that it has gone into administration.  The bankruptcy comes amidst serious non-payments to vendors and staff.  For employees, wages for June have reportedly been delayed.

The app, if it had launched, would have linked all the different ways people can listen to music, allowing users to join and create crowds of their own. The aim was to help people ”organically discover music through groups” that they trust. Unfortunately, Crowdmix didn’t make it to this stage.

Questions were raised when the app failed to launch amidst prolonged delays, despite raising a healthy $18.5 million in venture capital funding.  Last month, co-founder and CEO Ian Roberts departed the company, leaving the London arm of the business.  Those stirred further speculation that Crowdmix were experiencing financial issues and internal turmoil.

Initially, the company squashed this with a statement indicating that funding was on the way, with an ample cash pile to ‘take the business forward’.

Now, everything is careening towards the bad place.  Over the weekend, the company had been trying to secure emergency funding to keep the business afloat, but the deal fell through and Crowdmix was left in a position in which they ultimately couldn’t take the business forward.

As a result, the employees were apparently called into a meeting at the London office, and were told that the company failed to pay its vendors and therefore had no other alternative than to file for administration.

(Image by Dan Moyle, Creative Commons, Attribution 2.0 Generic (CC BY 2.0)

2 Responses

  1. Should've read 'The Lean Startup'

    Very sad news. Investors & founders take heed – this is a case study of exactly how NOT to launch a tech startup. How NOT to manage your finances, head-count & product development. How NOT to divert precious development money on marketing a concept that hasn’t even been built, tested, released or proven. Textbook case of a startup with a good idea, snappy deck, enthusiastic founders, loads of potential but ‘blue sky’ management who were off with the fairies and weren’t pulled to heel by investors & fellow directors who should have recognised the classic symptoms. For over a year their headcount has been way out of proportion to the actual task at hand. Software engineering is not like digging ditches – it often benefits from having LESS people in smaller teams. Same with label relationships. There is zero need for a marketing & PR team to push a product that doesn’t yet exist. They were renting super-expensive premises in trendy (expensive) suburbs, and their burn rate was absolutely ridiculous. Hopefully future investors and entrepreneurs alike will benefit from studying this unfortunate episode.

    • Janet

      They had 80 developers, rest assured they didn’t need more ‘development money’