Edinburgh-based cyber security specialists Payfont has collapsed into administration, despite last year being valued at £180m. Founded 14 years ago by chief executive David Lanc, the firm was developing technology designed to protect users digital identities and online data.
In 2015 it received a £1.2m cash injection, and was last year estimated to be worth between £106.7m and £180.3m by Inngot boss Martin Brassel. It was also the winner of the 2016 Scottish Knowledge Exchange Awards.
Donald McNaught of accountancy and business consultancy firm Johnston Carmichael has been assigned as Administrator, and has said that the move will see all 12 Payfont staff made redundant.
“The difficult decision to enter administration was made by the directors when it became clear that ongoing commitments could not be met from available working capital,” he said. “Efforts had been made in the months leading up to administration to raise sufficient capital to allow trading to continue but unfortunately time ran out for that fundraising exercise to be completed successfully. Our objective now is to maximise value for creditors and, ultimately, shareholders.”
In a statement, Lanc said that he was “deeply disappointed” by the development, but that it was a necessary measure.
He said: “We are deeply disappointed to announce that the company is going into voluntary administration. We are doing this before we run out of working capital. My sincere thanks go to the incredible Payfont team who have worked tirelessly to build our world-leading technology. Unfortunately, Payfont, as we know it today, will no longer exist. We had assembled a highly talented and specialist computer engineering team with sought-after skills. I wish the team well and hope to work with this fantastic band of brothers and sisters again.”
He also attributed the company’s woes to ongoing “distractions” that were not technology-related, leading to multiple personnel changes. Earlier this year, four members of the directing team resigned in the space of two weeks.
“The technology we have created remains world class and gives unprecedented levels of digital security for an individual’s digital identities and the privacy of their online data,” he added. “Industry analysts Gartner agree that Payfont have created cloud-based architecture that is unique and has massive potential for future applications in protecting individuals and organisations.
“This may be an opportunity for technology or venture companies in our space to invest in state of the art cyber security. In particular, the UK’s major banks could benefit greatly from our products, given their drive for consumer centricity and social inclusion.”
Cyber security specialist Professor Bill Buchanan, an advisory board member at Payfont, told DIGIT about his hopes for the future of the firm’s technology.
“Overall the technology that the company had developed – IOMI and ADECA – are both world-leading, and I hope that the code and IP generated can be used in future work,” he said. “There are significant patents involved, and the IP developed around these has been covered into products which could have a major impact on the market.
“I believe the dream and the vision of the people involved in the company should live on and for there to be renewed focus on the problems that Payfont tried to address – a world of citizen-focused security. With GDPR coming up, I believe the Payfont approach was well matched to the design of our next generation architectures, and where the citizen has control of their own environment.”
Lanc’s statement revealed that he will now work alongside the Administrator to ensure that the firm’s technology “finds fresh financial investment and new supporters.”