Boomin calls in liquidators after too few agents pay for its service
After several recent redundancies and a failed attempt to attract new investment cash, the plug has been pulled on the business, it is reported.
Sky News has reported that Boomin has called in liquidators just a week after the firm made a number of employees redundant.
It is reported an accountancy firm, BK Plus, has been brought in to handle the firm’s liquidation after it failed to find the £6 million to keep the enterprise afloat. Boomin is operated by Birmingham-based PD Innovations Ltd.
Several investors may have had their fingers burned by the demise of Boomin including Foxtons, DN Capital and Channel 4, all of whom invested directly or indirectly in the company’s startup.
Boomin’s 65 employees were notified about the plan to put it into liquidation on Monday afternoon, suggesting the liquidation is a voluntary arrangement designed to protect creditors.
Economic slowdown
Co-founder Michael Bruce has released a statement to Sky saying: “Our move to a fee-paying, revenue-generating model from April 2022 coincided with the start of the economic slowdown and the drying up of funding.
“In line with most tech company scale-ups we overhauled our business model to reflect the new market conditions, sharpening our focus on our key differentiated products and improving efficiencies to bring forward the point where we reach breakeven and generate positive cashflow.”
Signs of trouble at Boomin have been rumoured for weeks, and one insider tells The Neg it’s ‘all gone quiet recently’ at its HQ.
But the news of a liquidation will be a surprise to many – Bruce raised new investment cash this Spring including an injection of money from his own personal fortune.
Andrew Stanton, who has been a long-time Boomin watcher, tells The Neg that while a tech-savvy public were ready to embrace Boomin’s online tools, agents were more reluctant to take the plunge. The most recent communications from the firm revealed that around 8,000 agencies had signed up to use the platform, but it was not clear how many were prepared to pay for its services despite an initial tranche of high-profile ‘payers’.
It is a shame as any loss of a company reduces competition and increases the monopoly of the key players. Applaud the founders for genuinely trying something new and beneficial to buyers/sellers. Sadly they won’t be the last, as we read today that Doorsteps also folding.
This happened in the dot com, and what came out were some very strong newcomers. The greenshoots of a number of “decentralised” plays are coming through and if they can temper down their “crypto” focus could challenge the centralised model operated by the main portals. Work on digitising property transactions in HBSG reminds me of early days of open banking. Change is no doubt coming, how quickly and how profound it is remains to be seen, but my sense is that it will be transformational and when it happens it wont be a moment too soon. The time is now for agents and conveyancers to look at how they can reduce costs and improve customer experience, those that do will be the next gen…
Another ill conceived Bruce Bros gimmic bites the dust. They got away with the Burchell Edwards & Purple Bricks debcacles & knowing them will probably survive this, unlike the hundreds of honest hard working people they’ve cynically left out of pocket in their wake!
Another case of scaling a business using footprint instead of mindset. Money can’t buy me love.