Inside Pollen’s Collapse: “$200M Raised” but staff unpaid - Exclusive
Exclusive details about the collapse of the formerly high-flying startup. Could tech employees have known sooner they were on a sinking ship?
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Pollen was an events and festival tech startup. Founded in 2014, the company raised more than $200M in venture capital. It was headquartered in the UK, with a significant presence in the US and Poland. The company organized unique “event experiences” featuring superstars such as Justin Bieber.
Pollen seemed to have pulled off the improbable feat of building a business in the notoriously low margin industry of events, surviving Covid-19, and building a solid software engineering organization. In April this year, the company announced it had raised another $150M in fresh funding.
But just three weeks later, Pollen laid off about 200 people, a third of staff. Leadership assured employees all was well. However, from that point on, things got worse. Leadership later pulled the plug on Slack, employees were not paid wages, pension contributions went missing, and vendors were not paid. Some vendors took matters into their own hands; on 9 August 2022, JIRA was suspended when Atlassian tired of the company’s failure to pay.
On 10 August 2022, Pollen went bankrupt, collapsing into administration.
In this issue, we cover:
First impressions. Why were techies formerly working at the likes of Twitter, Deliveroo and Monzo attracted to Pollen?
Early warning signs. What were the red flags people ignored early on and now wish they’d heeded?
Growing signs of trouble. A detailed timeline of events from late 2021 to May 2022.
Layoffs and more trouble brewing. The events of May 2022.
The $3.2M not-yet-due charging of customers. 21st - 22nd May 2022 and the following days.
Collapse. June - August 2022.
Afterlife. How is Pollen still operating, despite being bankrupt?
This article walks through the collapse of Pollen, as told by 20 now-former employees. The majority of people I talked with worked in technology. This article tries to answer the question, could these tech workers have realized sooner they were on a sinking ship?
As I’ve dug into what happened, I uncovered increasingly unusual details:
Decent European investors investing more than $200M into the company over four years, and delegating partners to join the company’s board of directors.
Unknown to most employees, all external investors quietly resigning from their seats on the board of directors.
A partner at Kindred Capital referring to themselves as a current board member at a company-wide town hall, when documents show that the previous day they resigned from their board seat.
Shutting down Slack for the whole company after US employees took to the channel to complain about not being paid.
Why do I cover this story in such detail? I’m doing this because Pollen did something I know of no other company doing so in the past several years. After raising more than $200M in venture capital and hiring world-class tech talent - from people who previously worked at the likes of Twitter, Deliveroo, Monzo, Apple - they then failed to pay wages.
While we’ve seen other VC-funded companies go bankrupt before, the vast majority of those bankruptcies were ‘clean’ in the sense that employees were paid severance, vendors got paid, and any remaining money was returned to investors. This is how Fast shut down one year after raising $100M – as covered in Inside Fast’s rapid collapse – or how Airlift, once the largest startup in Pakistan, closed its doors, as covered in The Scoop #18.
In the case of Airlift, the leadership team decided to shut down operations as soon as they would have risked payroll, if they keep operating, according to an internal slide.
I am showcasing the story of how Pollen ended up unable to pay wages, in hopes of sharing lessons for employees to avoid similar situations.
This issue is too long to fit in an email without being cut off. Read the full article here.