Staff at CCUBE were informed on Thursday by administrators dVT Group that they had been terminated immediately following the appointment of voluntary administrators that morning.
ifa understands that the company, which launched in 2018, had tripled its users over the past 12 months and had approximately 70 advice practices across Australia using its software.
It is understood that CCUBE was in the process of finalising its final capital raise before it was likely to be come a profitable company, when the market fallout from the coronavirus crisis saw potential funding disappear. The company was in the process of contacting industry participants regarding potential funding, however the short time frames involved and prevailing market conditions prevented any deals being finalised.
CCUBE former general manager of sales and marketing Mark Papendieck told ifa the suddenness of the company’s shutdown had been a shock to customers and staff alike.
“2019 was a year of really strong growth for CCUBE and we were extremely well positioned to continue that growth as the advice landscape in Australia continues to rapidly shift,” Mr Papendieck said.
“Now of course, the coronavirus has put an end to those plans. I understand that the administrators are working to see if they can restructure the business or find a buyer for CCUBE, but in the meantime staff are now creditors and face a long wait to see what the outcome of the administration process is and how much of our entitlements get paid and when.”
Mr Papendieck added that ex-staff members were working with administrators to try and ensure the company’s customers were given top priority, but “as is usual in a voluntary administration process, the administrator has complete control over every aspect of the company at this point in time”.
It’s not nice to see that happen to any business, I’ve dealt with CCube last year and wish their staff and clients well.
A real shame. Understand they were wedded to outsourcing development offshore which is always challenging such a technical, legislatively driven space. Real shame for the staff and clients. Doing hard things on the cheap is risky. A risk that came to fruition here it seems
I’d heard good things about the product so that is a shame and good luck to the ex-employees going forward
This is such a poor outcome. There are about 22,000 advisers in Australia and with AMP and four banks licensing the majority, it’s hard for any software company to get the scale that’s needed. The lack of independent advisers in Australia has starved software innovation. Development and innovation in this sector has been stifled and consequently costs for independent advisers have increased. We’ve fallen behind other nations.
Keep looking Tom the small innovative guys are still out there.
If you are a startup in high growth mode few things are more important than having a good cash buffer, otherwise you will have a down round (raising money at a lower valuation with lots of negative consequences) or, as in this case, quickly go broke. I found that nothing is more important for entrepeneurs than enough cash.
There were some good folk working at CCube. I wish them all well for the future.