How Dan Wagner Powa'd through £144m of other people's money

How not to run a company: Administrator's report into Dan Wagner's Powa makes for devastating reading

As business failure go, the rapid demise of Dan Wagner's Powa Technologies can only be described as impressive: it absorbed the best part of £144m in equity funding and loans over a period of just two years, and not only spent it all, but also racked up millions more in debts before going under, leaving staff unpaid.

Indeed, both Wagner and his main backers Wellington Management have many questions to answer, while the recently released report from administrators Deloitte only begins to scratch the surface.

Powa was described as a "technology unicorn", which would be worth billions, according to Wagner, in just a few years even as it was running out of cash.

It was intended as an entrant into the mobile payments space. PowaTag was supposedly the main part of it. At a time when Apple Pay and Samsung Pay were launching, this would supposedly make it easier for consumers to buy goods and services via their mobile devices. Powa's twist was a mobile app that would enable "every consumer point of contact", including billboards and adverts, to become a point of sale.

As if hawking an app and associated infrastructure were not challenging enough, there was also PowaPOS, a mobile, tablet-based point-of-sale retail system, which was flogged off just yesterday to Israeli technology company SuperCom. Let's hope they can do more with it than Dan could.

Finally, there's PowaWeb, the e-commerce platform that supposedly tied it all together.

So, what does £144m buy you? Well, not a lot. The limited company's revenues increased from just £667,000 in 2013 to £4.9m in 2015 - against staff salaries of £15m in 2015, not to mention the £2m or so annual rent on two floors of the new Salesforce Tower in the City, which all contributed to colossal losses of just under £32m.

It was certainly a well-remunerated place to work, too - at least for some. Ordinary staff were told to forget about pay rises as they worked at a start-up. Salaries in 2015 averaged £89,000, although the report does not indicate how fairly the £15m wage bill was shared among the firm's 168 employees.

While all this was going on, Powa's founder, Dan Wagner - who many will know from the 1980s online information company Dialog (which became known in the City as Dial-a-Dog) - was extolling the virtues of the UK tech sector and pleading with government for a friendlier finance regime for start-ups like his.

Meanwhile, staff were coming (full of enthusiasm) and going (filled to the brim with cynicism). "I particularly liked the bit where I was recruited as part of a development team that had 19 devs on it by the start of May 2014 and was the only developer left on the ‘team' by the end of the year," wrote one developer in response to a LinkedIn post defending Wagner by Ariadne Capital founder Julie Meyer.

Another commented: "I always loved the company-wide emails Dan would send out criticising people's work. Great way to motivate staff!"

As an aside, while Meyer staunchly defends Wagner, it doesn't seem as if she invested a penny in his company, so she can perhaps be more relaxed about the losses it accrued, and maybe doesn't feel non-payment of staff wages around Christmas and the New Year quite so personally.

Glynn Davies, meanwhile, a retail journalist with a couple of decades under his belt, recounts how Wagner tried to sue him for libel for having the temerity to cover the cumulative pre-tax losses racked up by one of Wagner's other companies, Venda, which he had suggested would be floated on the London Stock Exchange for £170m. It got sold off to NetSuite (for reasons best known to themselves) for a whole lot less than that.

If half of what Wagner claimed came true, he'd be in line to become richer than James Dyson by 2020. In late 2015, as the last coppers rattled about in the company's depleted coffers, Wagner was boasting of a deal with China Union Pay that would, he claimed, generate £3.5bn over the next three years.

It was a good story, but according to Deloitte, was never likely to be a goer in the time-frame Wagner had promised his new best friends, even if the implausible revenue (gu)estimates had the potential to work out: "PowaTAG required modification for the Chinese market and significant work was undertaken to try to meet the delivery date in January 2016, which never happened," claims Deloitte.

Over the weekend, shy and retiring Wagner was on Radio 4's In Business programme to chat about "European unicorns", expressing his bewildered surprise when the administrators simply rolled up one day in February to shut the company down. He described it as "one of those things which sometimes happens, which is completely random" - like, perhaps, not being paid for two months because the company you're working for has pretty much run out of money?

PowaTag, though, may still come to something, with Wellington taking it as a souvenir at a notional value of £42m (the exact sum that Wellington was owed by Powa in December as a loan repayment). Let's hope its partner in the venture, Ben White, who had joined Powa as a director in January with a brief to raise funds to keep the failing business going, proves more capable than Wagner.

So, at least some parts of Powa will live on without Wagner. Indeed, it's probably their best chance of "life".