StrongRoom AI enters administration after investor alleges financial wrongdoing
Make us a preferred source
Make us a preferred source on Google
The news: StrongRoom AI has entered administration, capping off a turbulent month that started with the startup announcing a fresh $17 million capital raise.
HLB Mann Judd has been tapped as administrator, according to documents filed to ASIC on Friday night, with partners Todd Gammel, Barry Taylor and Matthew Levesque-Hocking steering the process.
HLB Mann Judd intends to sell StrongRoom AI, the company said in a statement.
The context: It was the second such appointment made public on Friday, with Walsh & Associates being made receiver of funds held by StrongRoom AI in Australia and New Zealand.
StrongRoom AI's month began to go sideways last week when EVP, the venture capital firm that led its recent funding round, called police on the startup. EVP told its own investors that it had discovered "significant discrepancies in relation to the financial accounts" of StrongRoom AI.
That move took many by surprise, including some of the startup's earliest backers. Aaron Michelin, board member at UK-based Tyson & Blake, told Capital Brief that no shareholder meeting was called before EVP made its decision. Tyson & Blake has been an investor in StrongRoom AI since 2021.
Other investors include Artesian Investments and InterValley.
StrongRoom AI develops software that aims to digitise the paper-based means of managing patient medication. It was founded in 2017 by Kieran Start, Max Mito and Christopher Durre, a trio of students from the University of Melbourne and Swinburne University.
The startup claimed $13 million in annually recurring revenue when it announced its capital raise earlier this month. The funding valued the company at $70 million.
What they said: "The Administrators are liaising with the Receiver, undertaking an urgent assessment of the business operations and intend to seek urgent expressions of interest for the sale of [StrongRoom AI] or its assets as a going concern," HLB Mann Judd said in a statement provided to Capital Brief.
"At present, the [StrongRoom AI] business continues to trade on a business as usual basis with the ongoing support of key stakeholders."
The source: ASIC filing
