The taxpayer is set to lose a significant portion of its investment in Gather, a start-up backed by Arsenal footballer Jorginho, which recently entered administration. According to insolvency filings, the company behind the investment app collapsed after misunderstanding the government’s approach to the Future Fund scheme.
Gather International, the owner of the app, believed that their £3.2 million loan from the emergency programme, half of which came from taxpayers, would convert into equity at the end of its term. However, the company’s administrator, Chris Andersen, stated that the directors failed to appreciate the Future Fund’s “hard line policy” of seeking repayment of the loan at the end of its three-year term, rather than allowing a conversion to equity.
The company was placed into administration at the end of May by its directors after the Future Fund issued a winding up petition in April. Gather, founded in 2019 by Italian entrepreneur and former Goldman Sachs banker Giovanni Bonaccorso, had invested £5.2 million in the app’s development and marketing. The app, aimed at young, everyday investors, allows investments starting at just £30 and enables users to follow others’ investment choices. Jorginho, the Arsenal and Italy midfielder, owns nearly 5 per cent of the business and had previously expressed his desire to set an example for young football players who often neglect to think about their financial future.
Gather had been seeking an agreement with the government to extend the loan and rescue the company as a going concern, but this request was reportedly rejected. The British Business Bank, which runs the Future Fund, stated that loan extensions are subject to various conditions, including timeliness of requests, satisfactory due diligence checks, and confirmation from directors that the company would be able to pay its debts following the extension.
The administrator warned that unsecured creditors of Gather, including the Future Fund, could be repaid as little as 3.44p in the pound. The Future Fund, a pandemic programme designed to support innovative companies through government loans match-funded by the private sector, remains “cautiously optimistic” that the portfolio will return a positive return to the taxpayer, despite rejecting loan extension requests in a small number of cases.
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