Welsh Tech Firm Amplyfi Enters Liquidation After £7m Public Investment
One of Wales' leading technology companies, Amplyfi, has collapsed into liquidation despite receiving substantial equity backing from public funds. The Cardiff-based firm, which developed an AI-powered market intelligence platform used by global clients, secured a total of £7m in investments from the Cardiff Capital Region and the Development Bank of Wales.
Market Pressures and Insolvency Proceedings
The business has faced increasing market pressures due to rapid advances in AI platforms, such as ChatGPT, which impacted its competitive position. Bethan Evans and John Cullen of the Cardiff office of insolvency practice Menzies have been appointed as joint liquidators. Menzies clarified that this is a creditors voluntary liquidation initiated by Amplyfi's board, not a result of a creditor petition.
Creditors, both secured and unsecured, are expected to have their owed amounts confirmed in the coming days. The liquidators will publish a statement of affairs via Companies House. Equity holders, including the Development Bank of Wales and the Cardiff Capital Region's equity fund, are the lowest ranked in the liquidation process and are not anticipated to receive any return, even if intellectual property assets are realized.
Investment Details and Fund Background
The Development Bank of Wales invested £2.6m in equity in 2022, becoming a minority shareholder as part of an investment round led by Hong Kong-based QBN Capital. The Cardiff Capital Region's £50m Innovation Investment Capital (IIC) fund, managed by Capricorn Fund Managers, made a £4.7m equity investment in 2023. This was the fund's maiden investment and now represents its first failure, although its other investments could yield significant returns in the future.
To date, the IIC fund has made ten equity investments, with a mandate of £3m to £5m per deal. The Cardiff Capital Region comprises the ten local authorities of south-east Wales. The IIC fund is part of the region's £1.3bn City Deal, nearly fully invested and funded by the UK and Welsh governments. The Development Bank of Wales is wholly owned by the Welsh Government.
Statements from Investors
A spokesperson for the Cardiff Capital Region stated: "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." They added that sustained efforts were made to support Amplyfi in a challenging AI landscape, and as a minority shareholder, they will await the liquidation outcome.
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."
Company History and Workforce
Amplyfi, based at the 1 Central Square office scheme in Cardiff, had made several redundancies last year. At its peak, the company employed around 40 people. The collapse highlights the volatile nature of the tech sector, particularly in AI, where rapid innovation can quickly disrupt established businesses.
