A tech company that claimed to “democratize creativity” by matching artists with design briefs for major brands is on the verge of collapse after receiving a settlement petition for unpaid debts.
Talenthouse, whose clients include Netflix, Coca-Cola, Nike and the UN, is facing legal action from creditors in the UK and is believed to have laid off most of its workforce, with top executives also leaving its parent company in recent days.
Its parent company, Talenthouse AG, has also announced the closure of four other subsidiaries on the grounds that they are unable to pay outstanding bills, including staff salaries.
The news follows months of financial turbulence. In February, the Observer reported how contributors to digital platform Talenthouse had not been paid thousands of pounds for projects completed months earlier. Some had worked on high-profile reporting, including designing posters, ad campaigns, and social media posts for clients like DreamWorks, Nationwide, and Snapchat. At the time, Talenthouse co-founder Roman Scharf apologized, saying the company was “working on a strong long-term solution” that would benefit creatives and would be announced soon.
But two months later, parent company Talenthouse AG has announced a major “restructuring” that includes the closure of the UK entity through which many of the artists were signed.
Talenthouse AG, which is listed on the SIX Swiss stock exchange, said a “strategic review” had revealed “substantial outstanding obligations” at the subsidiaries, including salary and tax payments that could not be covered. “The company has decided to stop funding these entities,” he said in a March 21 investor statement.
The news leaves many Talenthouse vendors, partners and staff in financial limbo.
Days before the restructuring was announced, the UK division of Talenthouse received a winding-up petition from Quantuma, a business advisory firm that is owed money and has applied in court to shut down the company.
If successful, it could lead to the sale of Talenthouse’s UK assets and the payment of any monies generated to those owed. But there’s no guarantee that creditors will get their money back quickly, if at all.
For Robert Acle, 47, an artist from the Philippines who says he is owed more than £3,200 by the British entity Talenthouse, it’s a huge blow. He has been pursuing payment for projects, including a campaign for a social media giant, since last August and said he was “very worried” about running out of money permanently. “All I get from Talenthouse is, ‘We do what we can,’ automated responses. Nobody seems to really care,” he said. “It is emotionally and mentally exhausting. I am overwhelmed by the more likely possibility that they will get away with it.” Talenthouse is also understood to owe money to taxpayers at another subsidiary facing closure, photography platform EyeEm, while employees say they have in some cases faced months-long back pay.
London-based Talenthouse was founded with a mission to democratize creativity and help level the playing field for artists internationally. On his corporate page, he implored companies to partner with him because “purpose-driven brands do better.” “Up your integrity. Virtue signaling is not enough. Take action with Talenthouse today and democratize creativity,” he said.
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In recent years, it has struggled financially, with experts blaming a series of acquisitions that drained the business of money and a broader tech-sector downturn. In recent months, staff across the company have been laid off and nearly all key executives have left.
Those who remain at Talenthouse, including co-founder Scharf, expect parts of the business, such as recently acquired Coolabi, which manages intellectual property for children’s and family brands, to continue through different entities, buoyed by cash from new investors.
However, a source said the Talenthouse platform, which was critical to the business, was unlikely to continue in its current form. “The team is destroyed. Management is devastated. The heart of the business is dead,” they said.
Scharf said it was “painful” to see some teams leave, but that Talenthouse AG was “actively working” on measures to save other parts of the business. “We seek to safeguard as much of the group’s business as possible in these difficult times,” he said. When asked what steps were being taken to ensure taxpayers and staff were paid, he did not answer. Quantuma, which brought legal action against Talenthouse Limited in the UK, declined to comment.
