The Swedish quizapp company Nuday Games has filed for bankruptcy at the Stockholm District Court. Northzone and Universal Music are among the investors which are now losing their money.
Nuday games have developed the quizapp Rock Science which lets its users compete in music trivia. As late as last fall, the company got Universal Music on board as an investor through a convertible bond.
The plan back then was for Nuday Games and Universal’s musicians to cooperate on upcoming apps. But it never got that far. According to public records that Breakit has seen, Nuday has now filed for bankruptcy.
“It was the most responsible thing we could do with the company”, Jacob Fant, the company chairman says to Breakit.
He explains that the bankrupcy is a result of an insufficient number of users.
“Our KPI’s simply weren’t good enough, especially the number of users. But building a company is extremely hard, so it’s not really that dramatic”, Jacob Fant says.
In addition to the money from Universal, Nuday has also raised money from Northzone, Almi Invest and the Tillander family’s venture capital firm Backstage Invest. How much the company has raised in its four years is still unclear. It is, however, known that Nuday raised more than $1.5 million a couple of years ago.
Did you plan on raising more cash to spend your way out of the crisis?
“Yes and no. There are always reasons to strengthen the company, but the market has become tougher, thus making it harder for us”, Jacob Fant says and goes on:
“There are very few games that see any real success. However, this has been a really exciting project, but I don’t have much more to say about it. It has been an exciting and educational journey, but what we are doing now is the responsible thing to do.”
Exactly what assets and liabilities remain are hard to say at this point. It is also unknown whether Universal has converted its bonds to shares or if the music label is one of the creditors. However, the bankruptcy manager, Jiro Terao, says that the company’s self reported debt is around $380,000 (SEK 3,3 million) out of which $116,000 is to different suppliers.
“These numbers are far from final. So far, no creditor has stepped forward with any claims”, he says.
In the latest year-end report – which stretches from August 2014 to August 2015 – the company reported assets amounting to about $1.74 million (SEK 15 million), most of which is capitalized production costs.
Despite the bankruptcy, at least one of the founders haven’t given up on the project quite yet. An undisclosed party has emerged as a potential buyer of the company’s assets. Jiro Terao reveals that the potential buyer is one of the current owners, but cannot disclose who it is or how much they should expect to pay.
“It’s extremely difficult to put a price on the assets since it consists mostly of source code and some domains and social media accounts. The price will basically have to be set through a bidding process”, he says.