UK-based smartphone maker Wileyfox entered administration, with The Register reporting the company had stopped receiving funds from its Russian backers.
The company launched with a fanfare in 2015, with the aim of offering low-cost, unlocked, devices. It said its bigger rivals have “massive organisations to support”, leading to higher costs for consumers, whereas Wileyfox was not burdened with such a legacy.
But with the smartphone market already fiercely competitive, launching a new smartphone brand is a long-term game. Without shareholders able to support the company through its growth phase, Wileyfox was facing a losing battle.
The Register, which spoke to administrator Andrew Andronikou (a partner at restructuring company Quantuma), reported Wileyfox’s holding company was primarily funded by Russian bank Promsvyazbank.
Russia’s central bank had to rescue the finance house late in 2017, due to issues impacting the country’s economy. As part of the bailout, limitations were placed on lending outside of Russia, which meant the tap was turned off for Wileyfox.
The administrator also said distribution of devices “hasn’t been successful”, with targets missed and “they still had to spend a lot on marketing”.
Other issues impacting the industry, such as rising component prices and currency issues, probably did not help. The Register said Wileyfox’s costs had been cut to the “bare minimum”, with staff laid-off and options being explored including a trade sale.