After a month of silence, the Australian start-up success story of Ninja Blocks came to an end over the weekend with a post from the company stating:

Ninja Blocks is out of money, so we can no longer keep developing Sphere…

The company was founded in 2012 and was considered by many to be a pioneer in home automation.  Over $3.2 million was raised by the company in Kickstarter and investor rounds with the bulk of funding coming from investors.  Despite this healthy cash base and sales of the firm’s products, development of the Ninja Sphere ran over time and over budget.

Faced without a secure source of future funding, CEO Daniel Friedman said that the firm chose to shut down in order to pay creditors and partially fulfill outstanding kickstarter orders.

This move by Ninja Blocks is a good example of a start-up taking very early steps to address liquidity problems.  Management say that they explored a range of different options with investors but were unable to secure the funding needed to continue.

With that knowledge the decision was made to cease operations. While the company will cease to exist, creditors will likely achieve a far better outcome from this decision than if the company had continued to operate until it collapsed under the weight of outstanding debts.

For more information please contact Daren Anderson.