Powa Technologies’ Own Payments Past Due

The U.K.’s top payments startup, Powa Technologies, is failing to pay its own employees and suppliers after running out of investment money and failing to raise fresh funding.

CEO Dan Wagner said that the company was “missing or late with staff payments and salaries” in a video message addressed to employees in December last year. The situation, however, went from sour to worse when it failed to make payments to its suppliers, including Luxembourg-based Regus, a workplace management company, that locked out several employees, according to Financial Times.

The London-based company, which offers PowaTag, a QR code-based shopping experience, to its users, has reportedly tied up with thousands of retailers, including the likes of Adidas, L’Oréal and Unilever, whose products can be bought just by snapping their QR code.

While Wagner remained bullish about its products’ growth prospects, its numbers have, so far, begged to differ. In December last year, the company said its PowaTag app downloads remained in the “low hundred thousands,” according to FT.

Until now, the company’s growth seemingly has just been fueled from investment — $175 million of which came from Boston-based Wellington Management, an investment company, reportedly valuing it at $2.7 billion.

And though the basic startup math explains how growth and profit don’t always go hand in hand, Powa’s failure in paying off its employees and suppliers also arises from its sky-high expenses — approximately $3.6 million of which it incurs every year from just paying rent for two floors of the “opulent” Heron Towers, the tallest building in London’s financial district.

In December last year, when Powa struck a deal with China’s UnionPay, Wagner remained optimistic about its growth prospects and future, but now, with no fresh funding in sight, he seems resentful to be backtracking on his own words.

“I can’t commit to that [level of funding in 2016], and that may have implications for the way in which we deal with staff bonuses [for 2015],” Wagner said.

The company said that it has appointed its former Asia-Pacific chief executive, Alessandro Gadotti, to secure new investment and to head its PowaTag mobile payments division.