Guvera to exit Australia but vows to press on in emerging markets
Troubled music streaming firm Guvera has admitted defeat in the local market and withdrawn from Australia.
Shareholders were advised in an email late yesterday that the company will exit Australia and reiterated its intentions to “focus all efforts in key emerging countries, such as India and Indonesia”.
It added that “international groups” have expressed interest in investing in Guvera.
The exit from its home market ends a catastrophic few weeks for Guvera which put two subsidiaries into voluntary administration and cut around 70 jobs after being denied a listing on the Australian Securities Exchange (ASX).
The company, which launched in Australia in 2008, owes creditors around $15m.
While Guvera had already made clear its intentions to focus on emerging markets, it indicated last month it would continue to operate in Australia.
But it soon became clear amid the failed IPO, mounting debts, fading advertiser confidence and two major updates to its services – which angered users and saw them drift away to other streaming firms – that maintaining a viable Australian presence was futile.
The note to “valued shareholders” said Claes Loberg, who took over from Darren Herft as chief executive 12 days ago, will temporarily relocate to India and Indonesia “to work closely with several key partners while we refine our product and brand strategy for these markets”.
“Unfortunately, the time has come for Guvera to withdraw from the Australian market,” the company said in its update to shareholders. “This will come into effect in the following week.
“After several changes in the product and a strategic re-evaluation of the business, we have decided that in order to achieve sustainable and long-term goals we will focus all efforts in key emerging countries, such as India and Indonesia. Research shows that in these countries, consumers simply can’t and won’t pay for the streaming of music and we feel we can return the greatest value to shareholders.”
It added that Loberg will focus on product development, brand channels and sales.
Guvera founder and interim CEO Claes Loberg: Guvera will relocate to India and Indonesia
Herft, meanwhile, will remain on the Guvera board and will work on “strategic investment opportunities from international groups that have expressed strong interest in Guvera”.
“This is an important part of the company’s financial growth,” the firm said.
Guvera has been approached for comment.
Whilst you don’t want to knock an Australian company for giving it a go, these guys might as well have piled all their investor cash into a large bin and set it alight.
The whole things has smelt bad from day one. [Edited by Mumbrella].
User ID not verified.
It looks like Guvera is done. Darren has admitted failure and stepped aside, but all he has done is turn the keys of the asylum over to the madman himself.
Claes is not CEO material. In fact, he was the initial CEO of Guvera, but was forced out of that position, because he has no people skills and absolutely no understanding of business or financial acumen.
But, despite all that, I am wondering how Claes plans to dig out of the hole Guvera has dug for itself in India. MASSIVE unpaid debt to artists, labels and business partners – not to mention unpaid payroll taxes (just like here in Australia).
One thing is for certain, wherever Guvera goes, they leave a trail of bad debt. Good luck changing that Claes…
User ID not verified.
Are they leaving Australia because it’s not an emerging market, or because APRA/AMCOS is owed a few hundred thousand as a creditor, therefore ensuring they probably won’t supply ongoing music rights to Guvera until they’re paid?
http://www.couriermail.com.au/.....ff31cf869a
User ID not verified.
As an avid user of the guvera music model, I have seen some pretty poor changes made, some good ones too, however I have ultimately loved this product. admittedly I am a subscriber so the shuffle issues that non paying consumers have isn’t apparent to me whilst using this music service. I simply don’t understand the (brand new) critical appraisals from the media. if this model was so bad, why is it that only now it has been red flagged as a poor performer.
Also I know facebook goes through changes, google goes through changes, Netflix and spotify go through changes, they are not always in keeping with what the consumer wants, but I assume the directors, and creative teams have a plan, and a direction they would either like to see the company move towards or at least the product moving by shifting paradigms within its own model. this is rarely apparent to outsiders, and obviously the end consumer.
I say good on them for attempting to create change in what ever market they have had in mind, whether that is mixed media, or music or advertising. and good luck into the future, I will welcome you back onto my music device when you return.
and claes loberg although looking like a metal musician, or whatever must have the required talent to get them to where they are today and I for one look forward to following this story into success.
User ID not verified.
Really? You are one of how many other “users”? Have they ever shared the actual “numbers”? For what you are paying to subscribe there are better services. Obviously from some one in the tent. A comparison with Facebook and Google is ludicrous and you have no idea what you are talking about. The company is basically bankrupt – so whatever “plan” they now have is irrelevant. They have had nearly 200 million to come up with a plan and failed. No one will invest in this company …. with a board that has completely failed its shareholders and done more to enrich themselves than actually build a business. The directors are [Edited by Mumbrella] and they are all still sitting there pulling fat salaries. Herft is the main culprit. What legitimate investor in their right mind would invest in this business and board?? Just shut it down and be done with it.
User ID not verified.
Deluded
User ID not verified.
I hope you pay your staff in India and Indonesia.
My salary is still unpaid… (I wasn’t based in Australia) and I doubt they will ever pay me.
Disgusting company.
User ID not verified.
Written by a ‘fan’ of Guvera? Or someone on the board trying to spin the article. Good one guys, nobody will notice.
User ID not verified.
Nice try Claes
User ID not verified.
Yes I guess that is my point. I don’t know what I am talking about. As I don’t work there, and I assume you don’t either. So any speculation on the plans or the relevance of plans is purely subjective on both sides.
I am not an accountant. Nor am I a tech developer. All I am saying is that I wish them every success. And all the criticism about them negates to mention the product. From a consumer I love it. I engage with brands. I listen to content.
They are people who are trying to create a business. I am certain all business models have had to be revamped from time to time. And this business has obviously some work ahead of it, if they wish to be profitable. But I hope they stay! Or at least return.
User ID not verified.
Guvera has one small problem. It has no revenue.
User ID not verified.
As an investor in this Basket case I feel embarrassed and ashamed that I got involved and probably won’t fully recover,
The stories that are starting to emerge are just as upsetting, unpaid wages and entitlements, suppliers etc, it’s all so dodgy, to this day they are still trying to raise capital, unbelievable,
I take full responsibility for getting involved with them AMMA, made it all sound sooo great,
Guvera are blaming bad press, the ASX refusal etc,
Guvera I say to you directly
THE BUCK STOPS WITH YOU,
BAD DECISIONS POOR MANAGEMENT, PERIOD!
ITS NOT THE ASX’s FAULT,
ITS NOT THE MEDIA’s FAULT
ITS THE BOARDS FAULT!! PERIOD!!
DARRYN HERFT & CLAES LOHBERG YOU ARE TO BLAME FOR THE MESS CREATED,
User ID not verified.
@fan of Guvera “all business models have to be revamped from time to time ” ummm after 180m and numerous model changes don’t you think enough is enough …just ask the Creditors and staff of maybe 10 countries around the world , which I bet your not one off otherwise you may have a different opinion .
User ID not verified.
You forgot to mention it was the fault of small minded Australians Quote by Paul Janz and also Tall poppy Syndrome Quote from Herft…excuses excuses excuses ….I believe ASIC and the Administrators are now looking closely at both directors of Guvera and Amma ..and rightly so .
User ID not verified.
That won’t get our money back
User ID not verified.
@ john, correct I am not a creditor, also not staff, so yes I assume if I were one of those I would have a different opinion. and you are probably right, after 180M maybe enough is enough. I haven’t got a clue as to whether they will be a success or not. but most of the people reviewing this don’t know either.
I just liked the end user product. in that my experience listening to music was cool, they had won app awards etc etc. and I liked it. that’s all
User ID not verified.
@fan … That’s what the Guvera Propsectus for IPO laid out … The supposed plans for moving forward. It was a complete con and the ASX picked up on it. As for the product, I should damn hope that they have some form of product after blowing 180 million so great that you like it! Unfortunately you are one of a very few … And anyone in tech knows that to spend 180 million on a front end app is ludicrous (Guvera has no back end, they rent it off 7Digital and Omnifone whom they owed 5 million and put out of business). So basically these guys in the tech some are complete frauds.
User ID not verified.
No , but they should be held accountable for what they have done ..it’s criminal
User ID not verified.
Yes but what can be done,
I didn’t want to be one of those horror story’s that you see on 60 minutes where some tin pot company has fleeced millions of hard earned dollars from people
And here we are its happening, so what can be done? Not much I suspect!
User ID not verified.