Powa Technologies

» see powa.com as it lived, on the wayback machine

~ the obituary ~

powa technologies was a london mobile-payments company founded in 2007 by dan wagner. its public pitch was that smartphones would replace credit cards for retail checkout, and that powatag, its scan-to-buy app, would be the bridge. in august 2013 it raised a $76 million series a from wellington management, which was the largest series a a european fintech had ever taken at the time. wagner claimed the round valued the company at $2.6 billion.

over the next two years powa announced partnership after partnership. the press releases claimed 240 retail clients and a strategic alliance with china unionpay, the dominant chinese card network. wagner leased an entire floor of heron tower in london and put up a powa sign visible from across the city. he did the magazine covers. the press treated powa as the british stripe.

almost none of it survived contact with an actual auditor. the 240 "partners" had mostly signed non-binding letters of intent. the unionpay alliance did not exist; unionpay's lawyers sent powa a cease-and-desist about it. the real valuation, when administrators later looked at the books, was closer to $106 million than $2.6 billion. by january 2016 the company missed payroll. by february it had about $250,000 left. on 19 february 2016 wellington called in its loans and deloitte was appointed.

i had no contact with powa. i was 32, working as an engineer in ankara, and london fintech vanity rounds were not part of my field of view. what i remember from 2016 is reading the obituary in the financial times, the way you read about a building that collapsed in a city you have not been to, and being mildly amazed at the size of the number on the way down.

~ the case file ~

~ what it sold ~

powatag worked the way most early mobile-payment dreams worked. you saw an ad somewhere (a poster on the street or a tv spot at home), opened the powatag app, and scanned the qr code attached to it. in some demos the app listened for an audio watermark instead, or pinged a bluetooth beacon at the same retailer. the app then triggered a purchase from the merchant attached to that ad, billed against your stored card.

the demo videos were genuinely impressive. the demos were also the product. real retail integration, where shopify or magento merchants could actually wire powatag into their checkout, never showed up at any scale that mattered.

~ the slide ~

by 2015, journalists who looked closely at powa's announcements started getting strange answers. retailers named in press releases would say they had heard of powa but had no live deployment. some had never signed anything. the financial times eventually reported that wellington itself was inquiring whether the customer pipeline was real. wagner blamed the press. the staff in heron tower started missing paychecks.

~ the postmortem ~

the trigger was wellington. as the lead investor, wellington had given powa its money as debt, not equity, which meant it could demand repayment at will. when the company missed its january 2016 payroll, wellington moved. on 19 february 2016 deloitte was appointed as administrator and the company was effectively dead the same afternoon. the heron tower lease was unwound. staff were laid off and the powatag patents were sold off cheaply.

deloitte later published a writeup of the administration as a teaching document on what happens when a company's reported numbers and its actual numbers diverge by an order of magnitude. it is one of the few times deloitte itself has written the obituary of one of its own clients.

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