Geniac, the London-based startup that provided an “office as a service” for small and medium-sized businesses, is soon to enter the deadpool.
TechCrunch has learned that majority owner Grant Thornton, the international professional services company, has made the decision to shutter Geniac as of April 5th. Customers were informed at the beginning of this month that they’d need to find a new provider, whilst Grant Thornton has confirmed the decision.
“We are sorry to announce that we have decided to close the Geniac service. We had high hopes for Geniac, but unfortunately, we are not making the progress we wanted, to be able to continue to provide the best service to our clients,” reads the email Geniac sent to out customers.
“Yes, we have we have made a decision to close Geniac. We will no longer be able to offer services to clients after 5 April 2018,” says a Grant Thornton UK spokesperson.
Founded in 2014 by ex-Accenture consultants, Michael Galvin and Eduardo Martinez, Geniac promised to be a one-stop-shop for SMEs that integrated payroll, accounting, legal and HR services into a single platform, in what it dubbed “office as a service”.
In July 2015, the startup announced it had secured support from Grant Thornton UK in a deal worth up to £22 million in backing, though I understand this was heavily contingent on Geniac meeting certain targets, which, it seems, it’s failed to do.
The announcement was also spun as a funding story when in actual fact Companies House records show that Grant Thornton effectively became the owner of the startup via its own acquisition arm at the time of the investment.
Related to this, according to their respective LinkedIn profiles, both founders left Geniac within the space of about a year. “Geniac’s founders, Eduardo Garcia and Mike Galvin, left the business to pursue other opportunities,” a Grant Thornton UK spokesperson tells TechCrunch.
The decision by Grant Thornton to pull its support of Geniac isn’t necessarily a surprise in itself — it’s not uncommon for acquisitions not to work out as well as hoped and regulatory filings show the startup made a loss of over £2 million in the year to June 2016 (it has yet to file accounts for 2017).
However, business owners I’ve talked to say that they chose Geniac as a provider because of its publicised support from Grant Thornton. The timeframe before Geniac shutters isn’t being well-received, either.
“One month’s notice is just too short a period,” says Ben Fletcher, who runs Fast Growth Icons, an invitation-only network for founders and CEOs of successful scale ups and is a user of Geniac. “It’s certainly given me a very dim view of Grant Thornton as they put their name behind it but have let the customers down”.
“I have found a replacement accountant at a slightly lower price, but the transfer over will cost me £1,000. Then there’s the time taken to sort out the transfer and bring the new accountants up to speed,” he adds.