Pollen’s enormous debt left behind: exclusive details
Administrators have summarized the $80M+ debt the company has accumulated, most of which will not be paid. Details on which vendors the company owes, and how much.
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Pollen, the events festival tech startup, went bankrupt in August after raising more than $200M in venture funding. In an exclusive investigative article published a month ago, I covered the events and details leading up this bankruptcy.
On 16 August 2022, the administrator, Kroll, took over the company with the goal of returning as much capital to creditors as possible. On 10 October 2022, the administrator sent its first report to Pollen’s registered creditors, and I got my hands on a copy.
Pollen had a complex corporate structure consisting of 8 companies. The administrator mapped out the corporate setup of Pollen, which was the entity called StreetTeam Software Limited, incorporated in the UK.
Pollen’s assets were offered for purchase at $2.5M before it shut down. According to the administrator’s report, Pollen received an offer on 9 August – one day before entering administration – to be sold for $2.5M. The directors, after discussions with secured creditor, Global Growth Capital, decided to not take this offer and to market the sale of the company more widely, hoping for higher bids. The company therefore entered into administration on 10 August, and was marketed to other potential buyers.
Kroll sent out a teaser document to 154 potential buyers, 14 of whom indicated interest, signed an NDA and met with management. Not one of them went on to make an offer.
On 14 September, the company which had previously offered $2.5M lowered its offer to $500K and asked for Just Experiences Limited to be included, which it wasn’t before. On 28 September, the same potential buyer lowered its bid to $250K.
The Pollen assets being sold are limited to its technology stack, the Pollen brand and shares in Abode Records Limited. The administrator notes that the fixtures, fittings and equipment are unlikely to have any value realization due to their age and condition.
The company had £280K ($313K) in its bank account upon entering administration. These funds have been frozen by the administrator. However, this amount is subject to an R&D claim from the UK tax office, the HMRC, and so might not be available to creditors.
Pollen kept operating for the past two months in the hope of a sale. Global Growth Capital – the investor first in line to receive any proceeds from the bankruptcy – and Stripe have funded Pollen, meaning the company keeps operating and can be sold. Given how little value the company seemingly has, and no interest except from one party, a sale is likely to happen soon, unless this potential buyer drops out.
Pollen owes £75M ($83M) to creditors, meaning employees are unlikely to see a dime of their owed wages. Here’s how the stack of claims line up, in order of priority:
1. Secured creditors: £18.6M
This claim is for Global Growth Capital S.A.R.L which issued credit to Pollen, back in February 2020. The administrator forecasts there will be insufficient funds to enable a distribution to be made to the Secured Creditor, or other creditors lower down the list.
2. Preferential creditors: £607K.
This amount is for employees’ claims of pay in arrears, holiday pay and pension arrears.
3. Unsecured creditors: £59.4M. This consists of:
General unsercured creditors: £24.3M. Includes vendors and funds who lent money to the company.
Employees: £3.1M
Pensions: £110K
HSBC overdraft: £64K
HSBC bank loan: £50K
Shareholders with claims: £2.2M
Convertible loans: £29.1M
AMEX: £91K
Employee expenses: £93K
Pollen owes money to a lot of software vendors. Here’s a list of a few better-known SaaS providers. These claims also help map out the vendor choices of the company:
Recruitment partners Pollen used, but didn’t pay:
A few other vendors whom the company did not pay:
The number of vendors Pollen used should be unsurprising for engineering leaders, but it may still raise some eyebrows. The list I share is only a subset of all the vendors used; it only includes those that registered their claims in the hope of seeing some of it paid. Pollen used many vendors not on this list, but those vendors likely did not think it worth the effort to claim money they will not get. An example is Atlassian, which terminated Pollen’s JIRA and other products, after months of non-payment.
To me, the charges from Monday.com are surprising, both in how much higher they are than any other SaaS vendor, and how Monday.com seemingly allowed such a huge bill to accumulate. The SaaS debts also reveal interesting details about Pollen’s tech stack. For example, how it used both AWS and Vercel, adopted the pragmatic approach of paying for a specialized virtual queuing solution by Queue-it over building its own, and how Pool was a Retool, Airtable and Grammarly customer.
Read more on what happened at Pollen in the deep-dive Inside Pollen’s collapse: “$200M raised” but staff unpaid.