IT was with great sadness that I read this week’s report that Bangor-based DeepStream Technologies, once chosen as a technology pioneer by the World Economic Forum in Davos, Switzerland, gave up its battle for survival and went into administration yesterday.
According to reports, this was not done by the company, but by one of its major creditors who seem to have decided that they would be better off getting back a small proportion of the money owed to them rather than supporting the development of the company.
Established in 2003, DeepStream Technologies had designed a range of smart sensors that would enable the next generation of energy efficiency devices to be developed for a range of uses both in the business and consumer markets.
They were essentially tapping into the zeitgeist of clean technologies and carbon off-setting, and were recognised as being at the forefront of their field for doing so.
For example, under the leadership of its chief executive Mark Crosier the company was ranked second in the Guardian’s CleanTech 100 – a listing of the 100 leading European cleantech companies – and was selected as one of just 23 companies on the UK Clean Tech Start-Up Company Index 2008.
It is exactly the type of high technology innovative company that is desperately needed in Wales and, as Rhodri Morgan himself said, had the potential to show that “companies can make it in Wales, and make it big”.
Clearly, there are some questions to be asked about how and why a company like this could go under, especially when there is, allegedly, vast amounts of Government finance available for supporting such innovative businesses through the recession.
Take, for example, the much lauded £15m Jeremie Fund that our politicians have been shouting about from the rooftops for the last few months.
As the Deputy First Minister himself wrote recently
“the Jeremie Fund will be of great value in helping Welsh businesses to ride out the recession… which delivers on the promise we made in the One Wales programme of Government to use ‘all the tools available to us’ to enable Welsh businesses to flourish and expand, including exploring options for seeking an agreement with the European Investment Bank. It will enable Finance Wales plc, a commercial funding provider owned by the Welsh Assembly Government, to make debt and equity investments to small and medium-sized businesses throughout Wales.”
Many will now be asking whether the failure of DeepStream Technologies, for whatever reasons, poses serious questions as to Jeremie’s fitness for purpose in supporting knowledge-based businesses in Wales to ride out the recession.
For example, if such financial support is available, then why wasn’t it used to save this company? Was DeepsStream Technologies encouraged to apply for such support by the Welsh Assembly Government? If so, were the owners turned down and what were the reasons for this? If WAG knew they were in trouble, what steps were taken to see by Finance Wales to support them? Did Finance Wales have any discussions whatsoever with DeepStream about their problems?
As anyone involved in the knowledge-based sector will tell you, great economic rewards only come after high technology firms have burnt through a lot of money in taking intellectual property to the marketplace.
There is a lot of risk associated with this but there is also the potential to create the next Google or Microsoft. Like similar technology-based businesses globally, Deepstream were struggling to raise such funds in the open market during this recession.
However, that is when government should step in – when the market has failed – and for some reason that just did not happen, despite Wales having the unique advantage of £150m being available from Europe.
Apart from the one-trick pony that is the Pro-Act scheme, if there was ever a sign that Wales is being seriously hit by this recession and WAG being unable (or unwilling) to do anything about it, then this is it.
If DeepStream Technologies can go under, a company recognised globally for its technologies and innovation, then what hope is there for the rest of Welsh business?
According to reports, this was not done by the company, but by one of its major creditors who seem to have decided that they would be better off getting back a small proportion of the money owed to them rather than supporting the development of the company.
Established in 2003, DeepStream Technologies had designed a range of smart sensors that would enable the next generation of energy efficiency devices to be developed for a range of uses both in the business and consumer markets.
They were essentially tapping into the zeitgeist of clean technologies and carbon off-setting, and were recognised as being at the forefront of their field for doing so.
For example, under the leadership of its chief executive Mark Crosier the company was ranked second in the Guardian’s CleanTech 100 – a listing of the 100 leading European cleantech companies – and was selected as one of just 23 companies on the UK Clean Tech Start-Up Company Index 2008.
It is exactly the type of high technology innovative company that is desperately needed in Wales and, as Rhodri Morgan himself said, had the potential to show that “companies can make it in Wales, and make it big”.
Clearly, there are some questions to be asked about how and why a company like this could go under, especially when there is, allegedly, vast amounts of Government finance available for supporting such innovative businesses through the recession.
Take, for example, the much lauded £15m Jeremie Fund that our politicians have been shouting about from the rooftops for the last few months.
As the Deputy First Minister himself wrote recently
“the Jeremie Fund will be of great value in helping Welsh businesses to ride out the recession… which delivers on the promise we made in the One Wales programme of Government to use ‘all the tools available to us’ to enable Welsh businesses to flourish and expand, including exploring options for seeking an agreement with the European Investment Bank. It will enable Finance Wales plc, a commercial funding provider owned by the Welsh Assembly Government, to make debt and equity investments to small and medium-sized businesses throughout Wales.”
Many will now be asking whether the failure of DeepStream Technologies, for whatever reasons, poses serious questions as to Jeremie’s fitness for purpose in supporting knowledge-based businesses in Wales to ride out the recession.
For example, if such financial support is available, then why wasn’t it used to save this company? Was DeepsStream Technologies encouraged to apply for such support by the Welsh Assembly Government? If so, were the owners turned down and what were the reasons for this? If WAG knew they were in trouble, what steps were taken to see by Finance Wales to support them? Did Finance Wales have any discussions whatsoever with DeepStream about their problems?
As anyone involved in the knowledge-based sector will tell you, great economic rewards only come after high technology firms have burnt through a lot of money in taking intellectual property to the marketplace.
There is a lot of risk associated with this but there is also the potential to create the next Google or Microsoft. Like similar technology-based businesses globally, Deepstream were struggling to raise such funds in the open market during this recession.
However, that is when government should step in – when the market has failed – and for some reason that just did not happen, despite Wales having the unique advantage of £150m being available from Europe.
Apart from the one-trick pony that is the Pro-Act scheme, if there was ever a sign that Wales is being seriously hit by this recession and WAG being unable (or unwilling) to do anything about it, then this is it.
If DeepStream Technologies can go under, a company recognised globally for its technologies and innovation, then what hope is there for the rest of Welsh business?
Comments
Which creditor pulled the plug - was it a bank?