A shining light in the UK artificial intelligence sector has imploded just three months after being hailed by the government as one of the most “exciting” firms in the burgeoning sector.
As reported by the Evening Standard, London-based Cervest, a so-called ‘climate-intelligence’ startup, had not paid most of its 100 employees since April before entering administration earlier this month.
The company, which specialised in using AI to model climate risks for businesses, collapsed just days after the London Tech Week, during which Sunak had outlined his vision of making London a global leader in AI.
Cervest was praised by the Department for Science, Innovation and Technology (DSIT) for its use of AI to align investment decisions with climate predictions, offering the promise of a more sustainable and resilient future.
Employees in the company told the Standard that they were given assurances that Cervest had sufficient funds to sustain operations for the rest of 2023.
Founder Iggy Bassi insisted that insolvency was not on the horizon, even stating in a message to staff in December that the company had secured the first part of a two-phase funding deal with a group of investors, including industry figures like former T-Mobile boss John Legere, former Microsoft executive Mike Slade, and prominent tech investor Zen Matoshi, who had all joined Cervest's board.
However, employees claim that Bassi failed to disclose that May's payroll was dependent on funds that had yet to materialise.
A spokesperson representing a group of ex-board members, including Bassi, expressed disappointment to the Standard over the company's administration and the inability to pay employees.
“We’re incredibly disappointed that external and unforeseen factors outside of Board control, have led to the unfortunate situation of Cervest going into administration and staff not being paid,” the spokesperson said.
“We have tried incredibly hard to ensure this did not happen and worked up to the eleventh hour to find a solution to keep the company moving forward and to meet its liabilities. Regrettably a viable solution could not be found.”