The Hamilton firm has $391,000 funds on hand, according to the first report by liquidators Jessica Kellow and Paul Manning.
But that money will be $66,000 shy of covering funds owed to secured creditors BNZ ($250,000) and FujiXeroxparent Fujifilm ($6000) and a preferred creditors list comprising staff (with $61,000 owed for pay and leave), IRD ($97,000 for PAYE and GST) and administrator’s fees owning $44,000.
The full amount owing to unsecured creditors is unknown but the list so far includes a Callaghan Innovation loan ($409,000), pre-appointment accounts payable ($511,000), an IRD small business loan ($25,000) and a loan from an un-named party ($20,000).
The list of 89 partnerships creditors runs from contract manufacturers in China, Hong Kong and Mexico to supply chain logistics firms in Europe to Mercury Energy, PB Tech, FedEx and Spark.
No assets other than the $391,000 in funds on hand are listed in the first report.
“We do not consider that a meeting of creditors should be held because there are insufficient assets to meet the cost of holding such a meeting and there are limited prospects of funds being available for payment of a dividend to creditors, other than to those who hold specific security or have a preferential claim,” Kellow and Manning say in the report.
Unlike an e-bike on land, you can't stop pedalling for a breather whenever you want. Gliding requires a flat sea. If there are waves, it's a case of keep pedalling your Manta5 or go for a paddle. The bikes sold from $14,995 up to $19,750.
The liquidators, Manta5′s founders and Callaghan (currently facing a round of cutbacks, along with other Crown agencies) have been asked for comment [update: scroll down for Callaghan response].
Bright Spark Innovations, trading as Manta5, was placed in voluntary administration on April 16.
An “urgent sale” ad placed in the May 6 Herald by BDO said the Hamilton-based start-up, which spent more than $18 million on its aquabikes, was being sold as a going concern, with a May 8 deadline. No further details were offered.
Callow and Manning were appointed liquidators on May 22 following a special resolution of creditors on May 21.
In a letter to shareholders in April, on the same day as the urgent sale ad, the firm said it had been unable to raise fresh capital. It said voluntary administration would give it “breathing room to rapidly explore alternatives”.
The company experienced rapid growth but then encountered “supply chain challenges”, the letter said.
In 2021, Manta5 chief executive Mark Robotham said the firm had just closed “a $2m top-up round”.
It had sold more than 400 units of its $12,990 Hydrofoiler XE-1 aquabikes, generating some $5m in revenue, but faced ongoing supply chain issues related to the pandemic.
Large orders from hire operators could not be filled - or at least, not for months.
A plan to raise a further $6m then list on the ASX within 12 to 18 months never eventuated.
Cuts
The firm had already cut staff and ceased promotional activity, the April 16 letter said.
“Yet these measures were insufficient to mitigate our financial strain,” the letter added.
In his 2021 interview, Robotham said Manta5 had 25 staff in New Zealand, two in China and four in Europe. The staff were focused on R&D and sales. The firm worked with contract manufacturers in China, Taiwan and Malaysia.
Torpedo7 founders’ new venture
Manta5 was founded by Guy Howard-Willis with his son Luke.
The pair earlier founded the outdoor goods website Torpedo7 and daily-deal site 1-Day, both of which were acquired by The Warehouse Group in 2016 in a $65m deal (earlier this year, Torpedo7 was sold for $1).
The father and son still held a majority stake in Manta5 ahead of the liquidation.
Howard-Willis first had the idea for a hydrofoil bike using a combination of pedal and electric motor power in 2010.
It was first put on the market nearly a decade later.
Manta5′s bikes were an eco-friendly alternative to a jetski, but also expensive and physically exerting - if you stopped pedalling, you would struggle to stay upright if there was any chop.
Although some deals have still got over the line, venture capital has tightened considerably in the era of higher interest rates.
Callaghan responds
“When any startup business fails it’s important to remember that, by definition, early-stage, innovation intensive businesses are high-risk,” a Callaghan spokesman said.
“The reason it is important for governments to support these types of business is that, at a portfolio level, the few startups that succeed create benefits well beyond the total cost of supporting all those who don’t succeed.
“It is also important to note that even those businesses that don’t succeed create enormous benefits for staff - for example, through upskilling and development of expertise in NZ - and the wider innovation ecosystem.
“Net job growth in economies typically originates from startups and the multiplier effect of highly successful startups such as Rocket Lab, Xero or Allbirds creates many new opportunities for other businesses following in their wake.
“Most startups that succeed provide high-wage, high-tech jobs that increase New Zealand’s economic diversity and resilience, and help to drive sustained, long-term economic growth.”
Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.
