One of Wales’ leading tech firms collapses into liquidation

Amplyfi has secured equity backing from the Cardiff Capital Region and the Development Bank of Wales

One of Wales’ leading tech firms Amplyfi, whose expansion plans were backed with equity investment of £7m from the Cardiff Capital Region and the Development Bank of Wales, has collapsed into liquidation.

The Cardiff-based firm had developed an AI powered market intelligence platform used by global clients to better identify and react to market changes. However, with advances in AI platforms, such as ChatGPT, the business had come under increasing market pressures.

Bethan Evans and John Cullen of the Cardiff-based office of insolvency practice Menzies have been appointed joint liquidators.

Menzies said the the position is a creditors voluntary liquidation driven by Amplyfi’s board and not a result of a creditor petition to liquidate the business. What creditors, both secured and unsecured, are owed is is expected to be confirmed in the coming days with liquidators publishing, via Companies House, a statement of affairs.

Equity holders are the lowest ranked in any liquidation process, so even assuming there is any IP asset realisation through the insolvency process – the Development Bank of Wales and the Cardiff Capital Region’s equity fund are not expected to get any return.

The Development of Wales backed Amplyfi with a £2.6m equity investment to become a minority shareholder as part of an investment round that was led by Hong Kong-based QBN Capital back in 2022.

The Cardiff Capital Region’s £50m Innovation Investment Capital (IIC) fund, which is managed by Capricorn Fund Managers, made an equity investment of £4.7m into the company in 2023.

It was the fund’s maiden investment and now represents its first failure, although its other investments could generate significant returns via future exits. To date the fund has made ten equity investments, with a mandate per deal of between £3m to £5m.

The Cardiff Capital Region is made up of the ten local authorities of south-east Wales. The IIC fund, through the region’s £1.3bn now nearly fully invested £1.3bn City Deal, was funded by the UK and Welsh goverments. The Development Bank of Wales is wholly-owned by the Welsh Government.

A spokesperson for the Cardiff Capital Region said: “Innovation Investment Capital is a £50m fund established as an arms-length, FCA regulated limited partnership. It is independently administered by specialist fund managers to provide scale up investment to growing businesses from across south east Wales and attract inward investment to the region.

“Following a rigorous process, IIC invested £4.7m in Amplyfi. Sustained efforts were made to support Amplyfi, alongside co-investors, in a challenging and rapidly evolving AI landscape. As a minority shareholder, we will wait on the outcome of the liquidation process.”

A spokesperson for the Development Bank of Wales said: ‘We were sorry to be informed that the directors of Amplyfi have taken the decision to proceed with the liquidation of the company. The Development Bank of Wales last invested in the business in 2022.

“We have invested £2.6m in equity in Amplyfi and, as a minority investor, we will now await the outcome of the liquidation process. It would not be appropriate to comment further at this stage.”

Amplyfi, based at offices at the 1 Central Square office scheme, had made a number of redundancies last year. At one stage it has a workforce of around 40.