A newly published report has shed light on the rescue of an augmented reality ‘treasure hunt’ app from administration this summer – and has also revealed that its creditors are likely to miss out on hundreds of thousands of pounds.
The Snatch app was dubbed the ‘Pokémon Go for brands’ as it used a player’s location paired with AR to transform their immediate surroundings into an interactive playground.
In the game, players travel around through a real map to find parcels. If they can hold onto a parcel for long enough without it being stolen, it can be opened to claim real prizes from one of the app’s partners.
Founded by CEO Joe Martin, COO Jamal Hirani and CMO Phil Lloyd, Snatch was backed by high-profile investors including LastMinute.com founder Brent Hoberman, Silicon Valley Bank and Unilever Ventures and closed a £4.4m seed round in November 2017.
But after encountering “cash flow problems”, Snatch Media Limited appointed Colin Wilson and Joanne Rolls from Opus Restructuring as joint administrators on 3 July 2018, who were able to secure a sale of the business and its assets in a job-rescuing deal.
A new report to creditors seen by BusinessCloud has revealed that Snatch was sold to London-based games publisher PlayStack Limited after administrators approached 38 existing investors and potentially interested parties.
An offer was received on 21 June and the sale was completed on 5 July 2018, two days after the appointment of administrators.
Harvey Elliott, founder and CEO of PlayStack, told BusinessCloud he was drawn to Snatch as it’s a “really unique idea in a crowded marketplace”.
“The original team behind Snatch has done an amazing job in creating something that not only engaged over a million people but got hundreds of brands to buy into their vision,” he said.
“The fact that they raised the level of investment they did is a testament to what a great idea it is. As a specialist games publisher, I believe we bring the skills and the expertise to help the team realise its potential.
“Right now we can’t talk about our plans for relaunching the game, but there’s definitely a lot of work being done, and we’ll be sharing a lot more in due course.”
Snatch employed approximately 50 staff at its peak in February 2018 but the headcount was reduced to 30 as a result of “various delays” and “fundraising issues”, according to the report.
At the time of the sale, only 19 employees remained all of whom were transferred to the buyer as part of the deal.
The administrators’ report also revealed that Snatch, which had raised $8 million in funding since inception, had approached the market to raise between $10 million and $15 million and that it had ambitions to expand to the US in 2019.
The company entered administration owing £6.94 million to creditors, with the majority of that debt owed to its US parent company Snatch Inc.
Meanwhile, HMRC was owed £318,603 and £325,825 was owed to trade creditors, who are only likely to recover £20,223.