Aussie start-up darling goes from riches to rags

ONE-TIME start-up darling Appster has collapsed into liquidation amid a slump in revenue.

The Melbourne-based app development company, which has over 400 staff across four offices globally, yesterday appointed Paul Vartelas of insolvency specialist BK Taylor & Co as administrator.

It blamed plunging reve- nues and a lack of work for its demise.

Appster was founded in 2011 by then 19-year-old business partners Mark McDonald and Josiah Humphrey, who jointly owned the business.

They kicked it off with just $3000 and have since gone on to be young rich listers, worth a combined $52 million last year.

At its peak, Appster was turning over about $19 million in revenue and had high-flying advisers including ex-PayPal chief financial officer David Jaques and ex-Virgin Australia executive Liz Savage.

Appster also boasted a blockbuster executive team, luring Computershare veteran Martin Halford as chief technology officer and Paul Cullinan, former finance lead at insurance broker iSelect, as chief financial officer.

It is understood about 25 Melbourne-based employees are likely to be affected by the company’s closure.

Appster’s business model involved providing start-up app businesses with development services.

It also offered help with strategy, business development and capital-raising advice, such as ensuring apps had ongoing subscription revenues built in.

In a profile piece in 2014, Mr McDonald said the group was “very similar to a lot of other app developers when we started”.

“Then we started talking almost exclusively to people in the start-up phase,” he said.

“[Our clients] are people that you wouldn’t expect to be brilliant at technology.”

Its first app, designed to teach Australian children the alphabet, was conceived by a teacher.

The group’s breakthrough came when the Frenemy app it developed for radio duo Hamish and Andy shot up the app charts.