Cyber security company Payfont hits hard times
PAYFONT, the cyber security firm that was once valued at £180 million and won backing from big names of the Scottish fund management industry, has gone into administration with the loss of all 12 jobs at the firm.
Directors of the Edinburghbased company called in administrators from Johnston Carmichael accountants after failing in their attempts to secure the funding needed to take a product to market.
“We are deeply disappointed to announce the company is going into voluntary administration,” said chief executive David Lanc, a former executive director of Royal Bank of Scotland’s cards business.
“We are doing this before we run out of working capital.”
The move into administration will probably dismay sector watchers in Scotland. Some hoped Payfont could join the list of homegrown Scottish firms that have become leading players on the global stage after developing disruptive technology, such as the Skyscanner flight search firm.
Payfont developed technologies it said would offer a “generational change” in how data could be safely secured and stored.
The company started trials of its online identity protection and data privacy solutions in March.
Mr Lanc insisted: “Our technology is not to blame, and remains both world leading and near production.”
He said Payfont had been unable to secure the next vital round of funding it required to take its proprietary and patented technologies to market.
“Payfont was on course to deliver its stated business plan but over the last six months we have been distracted by several issues that were not technology related,” said Mr Lanc. He did not give details of the issues.
Mr Lanc believes the firm may have enjoyed more success had it been based in the Silcon Valley technology hothouse in the US.
“Being based in Edinburgh, where we want to be, there remains a challenge in funding of high-tech companies that need time to generate global interest,” said Mr Lanc.
Johnston Carmichael said Payfont’s cyber security software has attracted significant international interest.
Restructuring partner Donald McNaught, noted: “Efforts had been made in the months leading up to administration to raise sufficient capital to allow trading to continue but unfortunately time ran out for that fundraising exercise to be completed successfully.”
The accountancy firm said it will try to maximise value for creditors and, ultimately, shareholders.
Payfont’s system allows users to choose their own online identity combinations from options that could include pictures, words or biometric tags such as fingerprints or voice. It uses cryptography to break up personal data into tiny granules that a cyber thief is unable to decipher.
With financial services identified as a key target market, the company’s technology appeared to catch the imagination of a range of prominent figures in the industry in Scotland in an age when hacks on companies such as Talk Talk hit the headlines.
Ian Paterson Brown, who held senior roles at fund managers Ivory & Sime and Ignis Asset Management, co-founded the business
and became commercial director.
Companies House records show he ceased to be a director in May. The appointments of two other former board members ended that month.
Mr Paterson Brown helped Payfont raise more than £4.4m in total. A long list of backers included Aberdeen Asset Management founder Martin Gilbert and Land Securities chairwoman Dame Alison Carnwath.
It built up a team of skilled programmers.
In April last year Payfont was valued at up to £180 mn by Welsh consultancy Inngot in an intellectual property exercise backed by Scottish Enterprise.