Roli's keyboard was billed as a modern musical instrument
A start-up that made musical instruments has collapsed into administration despite being given taxpayer funding to help it survive the pandemic.
Roli is thought to be among the first failures of the Chancellor’s Future Fund, which lent £1bn to small businesses seeking cash during Covid.
The company was founded in 2009 by entrepreneur Roland Lamb and developed a redesigned piano, computerised piano keyboard called the Seaboard and a digital keyboard designed to help people learn to play.
It burnt through $75m in venture funding from investors including Sony, Balderton Capital and Pharrell Williams, the Happy and Get Lucky singer. Business Insider first reported Roli’s collapse.
Last year, The Telegraph revealed Roli had become a beneficiary of the Future Fund. The company refused to reveal the size of its convertible loan from the Government.
The fund, run by the British Business Bank, had discretion to dish out between £125,000 and £5m in cash to start-ups, which had to be matched by investors.
It is thought most shareholders in Roli have been wiped out and it is unclear if lenders, including the Future Fund, will receive anything. It is understood Future Fund debt is classed as unsecured credit.
Despite its collapse, Roli will spin out a new business, called Luminary, that will focus on digital music lessons and aims to become the “Peloton for piano”.
That new business has received £5m from early Deliveroo backer Hoxton Ventures. It will also take on venture debt owed to lender Triplepoint Capital and its intellectual property. Mr Lamb will remain chief executive and many of its 70 staff will join the new division.
Mr Lamb said: "Our lead investor Hoxton Ventures was not prepared to fund Roli and wanted, rather, to invest in Luminary to drive forward the consumer opportunity."
A British Business Bank spokesman: “We do not comment on individual companies. The Future Fund helped keep investment flowing to innovative UK businesses during the pandemic.
"Designed to create a bridge to an innovative company’s next funding round, over £1bn of convertible loans were issued to more than 1,000 firms. Over 150 companies have already seen this funding convert to equity as they have gone on to successfully raise further private sector capital."
The Treasury declined to comment.