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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Troubled music streaming firm Guvera has admitted defeat in the local market and withdrawn from Australia.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”.

Guvera-logo

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.

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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 to relocate to India and Indonesia

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.

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