Genie's dreams go up in smoke

By CHRIS BARTON

An inability to attract venture capital in "difficult and uncertain market conditions" has forced Mt Wellington-based software company Genie Systems into receivership.

"The last few months have conspired against us," said Phil Norman, chief executive of listed company Strathmore, which put $3 million into the company for a 16 per cent stake.

Receiver Bruce McCallum of McCallum Petterson said Genie was continuing to trade and the intention was to market the business as a going concern.

An announcement would be made in 10 to 14 days.

The receivers were called in by second debenture holders Peter and Rachel Garden. Mr Garden founded the company in 1998 with the goal of delivering e-commerce software to mid-market companies worldwide.

It rapidly became a poster child for the new economy as its strategy for breaking into the US drew plaudits from industry watchers.

At one point six of Genie's staff were based in the US, including chief executive Mike Hendry.

By last December the company had 53 staff and had sold its Orderware software, which helps companies to manage their supply chains, in New Zealand and overseas.

Genie, hoping to avoid a clash with market leaders Ariba and Commerce One, aimed for the middle market, selling its software for between $100,000 and $1 million.

Clients included the Toys 'R' Us division Babies 'R' Us in the US, Singapore shipbuilder Keppel Fels and the Australian subsidiary of Universal Music.

New Zealand customers included Hart Candy, Lion Nathan and Fisher & Paykel. The software has also been rented via Unisys ASP Services.

However, sales failed to reach their early promise and Genie cut staff numbers to 35 this year. The firm had been hoping for further funding from Strathmore.