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In the past 6 months we have then started to see layoffs across the start up space as they sought to become cash flow positive or at least decrease the cash drain. This has not however stopped the closures in the fast grocery delivery space and with food operator Deliveroo.

Around 50% of Australian venture-backed technology startups fail within five years.

The asset values for e-commerce and technology start-ups have fallen significantly and a number of capital raising have resulted in what are “down rounds” highly dilutive capital raisings.

Key Challenges

Olvera has worked with a number of start-up organisations working through changes in the industry supporting them through safe harbour programmes and new capital raises. Investors have become more reticent in continuing to fund new businesses that are focused solely on revenue growth demanding that they manage the cash burn and move to positive cash generation.
Falling demand for fixed line services and strong price competition in the mobile services space have significantly constrained the subdivision’s ability to generate revenue. Consequently, industry revenue has fallen at an annualised 1.2% through 2021-2022, to $35 billion, but is projected to recover over the five years through 2026-27, to $37.2 billion.
NBN is also forecast to drive sector declines, as a switch from copper systems to fibre optics has increased the number of internet retail services. Internet service providers have historically been among the fastest growing operators in the technology sector.
Projected rise in subscribers and internet usage will support industry revenue growth. However, the market has become increasingly saturated over the period, reducing the total scope for industry expansion. Overall, industry revenue is forecast to grow at an annualised 1.1% over the five years through 2026-27, to $6.9 billion.
Australia is home to some of the market leaders in technology security and data management but has one of the world’s smallest venture capital markets for technology startups.
The recent data hacks which have affected a number of high-profile companies have highlighted to the public and corporate Australia the need for stronger cyber security and data management.
The appetite in capital markets for technology startups with cash intensive operations has greater reduced while the recent collapse of FTX has further highlighted the need to strong corporate governance around these new technology platforms.

Our Experience

Olvera has worked with a number of start-up organisations working through changes in the industry supporting them through safe harbour programmes and new capital raises.

Investors have become more reticent in continuing to fund new businesses that are focused solely on revenue growth demanding that they manage the cash burn and move to positive cash generation.

Key Insight

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July 24, 2020

5 things a business can do during a crisis

Overcome the challenges brought by the COVID-19 pandemic While many businesses find themselves in an economic crisis amid the COVID-19 epidemic, it is crucial to be proactive and act as soon as possible. Here are...

Case Studies

Howard’s Home Storage is one of the leading specialist retailers in home and office storage systems with a network of 58 owned and franchised stores.

As part of a proposed sale of the business the company had entered into agreements to acquire the franchise stores that it did not own, the sale did not proceed and as a result, the franchise network began to underperform, and unable to reach an agreement with its banks appointed an administrator to the Group.

We worked with the Group’s founders on a Deed of Company Arrangement.

Olvera principals acted as advisors to WIN Corporation in the restructure of Nine Entertainment and proposed acquisition of the business as part of a debt for equity swap.

Olvera principals worked with Mezzanine lenders and their advisors, and distressed investors who acquired positions through a syndicate sell down.

Retail Adventures was a retail chain of 1,000 discount variety stores across Australia operating from three national distribution centres.

The company was operating under three state brands the most recognisable was the small retail brand of “Crazy Clarks” and the big box format “ Sam’s Warehouse”. Over 15% of the portfolio was loss-making a the commencement of the programme.

Over 6 months we consolidated operations in tow distribution centres in Brisbane and Melbourne, consolidated into 2 national brands, closed 150 stores and renegotiated the leases on a further 500 stores. The restructured group was sold back to its main shareholder for less than the value of its secured debt with networking capital funding through an inventory of $22m.

Ellery is a luxury Australian fashion brand with design offices in Paris and Milan and production facilities in Sydney.

Less than 5% of global sales were generated in Australia through a local shopfront and wholesale clients.

An assessment of the business and costs of manufacturing identified a failure in the budgeting process of production. We identified that 15% of the costs of production was double handling of products and sample in transhipment. A further 12% of goods were damaged as a result of poor quality control and manufacturing in the Australian supply chain.
Our solution was radical, we closed all Australian operation and negotiated a license agreement with an Italian agency to relocate manufacturing to Italy.

The changes provided working capital for the on-going business, settled the secured debt and provided for an orderly sell-down of inventory over 12 months. Overall production costs were reduced by 20% and the founder Kym Ellery was able to focus on design and marketing as a licensed brand.

Kate Barnet

PRINCIPAL

Kate develops strategic solutions for groups dealing in crisis management and/or distress investment. She has over 30 years of experience working with distressed companies in the financial assessment, recoverability, and sustainability of risk assets.

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Olvera Advisors

Kate Barnet

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Kate Barnet is a recognised leader in the insolvency and reconstruction industry.

Damien Hodgkinson

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Damien develops strategic solutions for groups dealing in crisis management and/or distress investment.

Mirzan Mansoor

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Mirzan has in excess of 13 years of experience across restructuring and turnaround, corporate finance, mergers and acquisitions and corporate banking in Australia and in Singapore

Michael Billingsley

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Michael offers Olvera Advisors over two decades of international restructuring expertise, adept at innovatively supporting diverse businesses, from small firms to listed companies.

Tony Wright

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Tony contributes 15 years of insolvency experience to Olvera Advisors, with diverse industry expertise and a unique background in ASIC’s Enforcement Division.

Neil Cussen

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Neil Cussen, a leading authority in insolvency and reconstruction, offers 35 years of experience, excelling in asset tracing, business recovery, and cross-border insolvencies.

Robyn Karam

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Robyn’s inclusion in the Olvera team brings an added 15 years of expertise in corporate reconstruction, insolvency, and forensics.

Diana Talevski

DIRECTOR

Diana Talevski is a dedicated and experienced Registered Trustee in Bankruptcy, specialising in the dynamic field of restructuring.

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Restructuring & Turnaround

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Consumer Services

Insolvency & Restructuring in the Consumer Services Industry in 2024

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Ellery

Ellery is a luxury Australian fashion brand with design offices in Paris and Milan and production facilities in Sydney.

When Should My Business Consider Voluntary Administration?

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Technology & Communication

Around 50% of Australian venture-backed technology startups fail within five years.

Key Challenges

Our Experience

Key Insight

5 things a business can do during a crisis

Case Studies

OUR CLIENT

JOB TYPE

DATE

PRACTITIONER

Kate Barnet

Olvera Advisors

Kate Barnet

PRINCIPAL

Damien Hodgkinson

PRINCIPAL

Mirzan Mansoor

PRINCIPAL

Michael Billingsley

PRINCIPAL

Tony Wright

PRINCIPAL

Neil Cussen

PRINCIPAL

Robyn Karam

PRINCIPAL

Diana Talevski

DIRECTOR

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