Amuso goes into voluntary liquidation
Online payment problems and "technical issues" led to company being wound up.
Online cash trivia and bingo business Amuso.com has ceased trading and gone into voluntary liquidation following “material problems with third party software” and “insufficient income to cover overheads”, eGaming Review has learned.
According to a legal report seen by eGaming Review, the company experienced material problems with third party software, “particularly with respect to online payments”. As a result its main backer, Mangrove Capital Partners, that invested US$1.5m in August 2007 when the business was founded is, according to the report, “no longer prepared to fund the business going forward” and has withdrawn its financial support. Amuso was also backed by several angel investors who will now have to wait to see how much of their original investment they can recoup if the company is sold.
In March this year Amuso entered into a commercial partnership with online gaming network operator Cashball and Swedish gaming technology provider Nyx Interactive to create a trivia gaming network with an integrated bingo and casino suite based on the Nyx account in an effort to increase revenue and profitability. According to the report it then “invested heavily in direct consumer marketing” in April this year, and raised additional investment this summer with the objective to “accelerate new product development and marketing”. However, this funding has now been withdrawn and the company has ceased trading.
Barak Rabinowitz, Amuso CEO, told eGaming Review that “profits didn’t ramp up as fast as we’d like to cover the overheads so we decided to wind up the company”. He said technical and software issues materialised as soon as it entered the B2C space in March this year and called it a “contributing factor to the downfall of the business”.
“We had a very healthy community (at one stage around 200,000 registered users) but we had some technical issues that really hampered the growth of the business and lead to it being wound up”, he said. “We had issues particularly around the payments, deposit and withdrawal process. You can have the best games but this is really a key point in the chain.”
Rabinowitz said the site would remain live until the end of September and that users had been advised to withdraw funds from their accounts as soon as possible. A “facility” has been set up by Nyx Interactive to help users withdraw their funds if they are unable to do so by the end of this month, he said.
Amuso has appointed Peter Davies, an independent agent, to attempt to sell the business as a going concern. Rabinowitz said this included the intellectual property and assets including software.
“The games, including the Weakest Link, are governed by commercial agreements that dissolve in the circumstances. They will come off the market and go on the shelf,” said Rabinowitz.
“The investors will receive proceeds from the sale of assets after the creditors. Commercial partnerships will be dissolved as provided for in those contracts.”
Amuso had commercial partnerships with high profile media players including AOL, Associated Newspapers, Bebo, MySpace, and MTV in Europe, and Heavy and Rap Basement in the US.
Staffan Lindgren, executive vice president strategic business development at Nyx Interactive told eGaming Review that Nyx was in talks with the liquidator to recoup funds owed and potentially acquire two pieces of intellectual property. “There are a couple of things we could buy. Amuso had a very good in-house development team so there are some things that interest us.”
He added he was sorry to see the closure of the company as Amuso was “one of the first companies to enter the entertainment/online gambling space”. “I liked the concept very much, Amuso was one of the first movers in this space and we hoped to make a change to the market with them. But I am still confident this area has more to offer and we will be pursuing it in the future.”
Rabinowitz added that Amuso “does not owe a significant amount” as it never took on credit. “It’s more about where there was some working capital that had been extended to meet the working capital commitments. All the staff have been formally let go.”
He refused to say how much the business had lost but suggested that the company had been “on the road to breaking even”. “Break even is an elusive target. If you feel that you’re growing you start to invest more heavily and take on more costs for growth. If I’m correct Facebook only broke even this month.”
Rabinowitz has since moved offices and set up a premises on his own. He said he was already working on new projects in the Facebook and mobile space which he said were “still in their infancy” and that he would be able to comment on this in January next year. “What we tried to do at Amuso.com was to innovate new formats to reach a more mainstream audience for gambling products so I’m going to continue to focus on innovative ways to acquire consumers and create value.”