Embattled Queensland music streaming startup Guvera will be quitting the Australian market in order to focus on “emerging” regions.
It comes as its chief executive and co-founder Darren Herft has left the company, to be replaced by fellow co-founder Claes Loberg in an interim capacity.
Guvera’s future has been in doubt after its planned $1.4 billion IPO was blocked by the ASX. The company has since placed two of its subsidiaries into administration and is currently undertaking an emergency capital raise.
As the Courier Mail reports, the company issued a memo to shareholders this week saying it would be ceasing operations in Australia from next week.
“Unfortunately the time has come for Guvera to withdraw from the Australia market,” the letter said.
“We have decided that in order to achieve sustainable and long-term goals, we will focus all efforts in key emerging countries, such as India and Indonesia.”
Guvera’s business model is based around advertising and branded partnerships rather than subscriptions, and the memo says this method is most effective in these “emerging countries”, rather than the likes of Australia.
“Research shows that in these countries consumers simply can’t and won’t pay for the streaming of music and we feel we can return the greatest value to our shareholders,” the memo said.
Herft will be staying on as a member of Guvera’s board, while Loberg will be “temporarily relocating to Indonesia and India” to work with partners.
Just last month the company pledged to maintain its service in Australia.
“Guvera intends to continue to operate in its home market of Australia and will dedicate its focus, in the short term, on the high-growth emerging markets on India and Indoniesa,” a company statement in June said.
Guvera attracted the national spotlight after releasing its plans for a $1.4 billion IPO earlier this year despite having revenue of just $1.2 million in 2015 and a corresponding net loss of more than $80 million. According to the document, the company already had net losses of $55.7 million for the first half of 2016.
After attracting much criticism from leading figures in the Australian tech sector, the ASX blocked the listing, throwing Guvera’s future in doubt.
StartupSmart has contacted Guvera for comment.
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