Pollen Experiences was once considered one of the most innovative companies in travel, live music and fan-to-fan marketing, but this week, officials announced that its U.K.-based parent company, Streetteam Software Ltd., was preparing to undergo restructuring in administration — a voluntary process similar to filing chapter 11 bankruptcy in the U.S.
The news is a stunning fall from grace for a company widely regarded as the largest of its kind in the travel and music space. In April, the company’s founders Callum Negus-Fancey (the company’s CEO), his brother Liam Negus-Fancey and company president James Ellis announced that they had raised $150 million in a Series C funding from six well-known venture capital funds, bringing total funds raised by the company to an astonishing $250 million. Much of the April funding had closed back in December and included the conversion of two convertible loan notes raised throughout the previous 18 months to help fund the business through COVID-19 and venture debt funding.
The April announcement was supposed to demonstrate financial stability for Pollen, which works with hundreds of artists including Justin Bieber and Duran Duran, as well as J Balvin, who partnered with the company on his NEON festival series.
Behind the walls of Pollen’s LA headquarters, however, life inside the company was getting more chaotic. One former employee, Joshua Fakhri, said that in 2019 and 2020 at least 10 “employees were each personally given $10,000 in cash and instructed to fly to Mexico without declaring it, as a way to structure…outbound cashflows” for JusCollege, a travel company Pollen acquired in 2018, and “evade United States and Mexico customs officials,” according to a civil complaint filed in LA Superior court on Oct. 10, 2020, alleging that “this cash was then used in Mexico to pay vendors owed money by JusCollege.”
A spokesperson for Pollen disputes this characterization, saying that the money was declared legally and transported in cash because JusCollege’s payment systems had not yet been integrated with those of the parent company. The spokesperson also says that Fakhri’s lawsuit was settled, “for an amount substantially below his claim” and that “he went on to set up a competitive company.”
Fakhri also alleges that “in 2019, Streetteam threw a company retreat in Northern California, where numerous executives and employees consumed illegal drugs, including acid and mushrooms. The debauchery was so extreme, the venue blacklisted the company from ever returning,” according to the complaint written by Fakhri’s lawyer Marc Gans. The Pollen spokesperson says the characterization of drug-taking is untrue and that the company was asked to return by the venue.
On May 4 — less than four weeks after the April funding round was announced — members of the company’s board of directors began exiting, starting with Pär-Jörgen Pärson, whose Swedish venture firm Northzone had led a $60 million initial cash raise for Pollen in 2019. That same day, Nicola Mcclafferty with Irish venture fund Molten also resigned from the board. By June 30, Pollen’s eight-member board was down to three people — Ellis and the Negus-Fancey brothers.
On July 7, the company released a statement saying it was abandoning its growth-at-all-costs model to focus on short-term profitability.
“For more than a decade startups have been built on the principle that growth is the biggest driver of valuation and is more important than anything else, however, this principle is not holding true today,” the statement reads. Citing inflation, skyrocketing energy prices and the rising costs of living, the statement noted a shift in investor mentality toward businesses with strong potential profitability.
On July 12, Streetteam filed its annual report for 2021, showing that the company ended the year more than $61 million in the red. That was up 27 percent over 2020 when the company posted losses of approximately $48 million, according to financial documents. The losses were likely due to skyrocketing costs — up 76 percent year-over-year.
Despite those losses, the report’s balance sheet showed that the company had ended the year with approximately $16 million in the bank, with Ellis noting “the group’s liquidity is sufficient to meet the group and parent company’s obligations and commitments” through Dec. 2023.
Just 22 days later, the company announced that it had hired insolvency specialists Kroll to administer its debt restructuring while it continued to negotiate with a potential buyer. Accompanying the announcement was a statement blaming the restructuring effort on the “knock-on effects of COVID-19 over the last two years, which decimated much of the travel sector, together with the tech stock crash and current consumer uncertainty in light of global economic conditions.”
The company’s own financial statements, along with 10 lawsuits filed against Pollen and Streetteam since 2020, show it has long faced cash flow challenges, often missing deadlines from outside vendors for payment. A spokesperson for Pollen told Billboard that 10 such lawsuits “is not unusual for a company of our scale and we do not comment on ongoing legal matters.”
Pollen was launched by the Negus-Fancey brothers in 2014 as Verve; it received U.K. taxpayer support through the British Business Bank’s Future Fund. It was originally conceived as a technology company built around influencer and word-of-mouth marketing to help promoters sell tickets for festivals and events. Early supporters included Gareth Jefferies, investment manager at Northzone, an early investor in Spotify, who saw the company as a potential sales tool for brands to connect with Generation Z customers and capture part of the $800 billion that 16–28-year-olds in the U.S. spend annually. In 2018, Verve began acquiring travel and tour companies like JusCollege and Campus Vacations; a year later, it received a $60 million cash infusion from Northzone and European VC Sienna Capital and changed its name to Pollen. At its height in 2019, the company had a network of 35,000 active member sellers who sold 330,000 music and travel experiences to their peers, partnering with brands like Live Nation, MGM Resorts, TAO, Hakkasan and AEG.
Pollen was hit hard by the COVID-19 pandemic in 2020 and took drastic steps to reduce its workforce, according to Fakhri, a regional manager hired at Pollen in 2018. Fakhri alleges that the company didn’t realize it owed him a $100,000 severance payment when it laid him off in early April 2020. When he inquired about the payment in writing to company executives, they allegedly attempted to rescind the layoff, Fakhri said in the lawsuit, then fire him for cause three weeks later to avoid paying out any severance. Fakhri eventually settled with Pollen for far less than the amount he sued for — according to the Pollen spokesperson — but took the company back to court after it missed a deadline to wire him a scheduled payment of $25,000 in February.
A female executive assistant who quit the company in January 2021 sued in LA Superior Court four months later, alleging that in 2019 she had been subjected to “unwelcomed touching” and that an executive at the company “sent her a picture of his naked erect penis by text message,” according to the civil complaint. The employee said she was retaliated against when she complained.
A spokesperson for Pollen says that an attorney ran an independent investigation and found that, “not only was her retaliation complaint not corroborated but that we actively supported her throughout her time here.” The spokesperson also said, “the affected employee stayed with the company a further 18 months and enjoyed promotions. And the person accused was asked to leave the company.”
Additionally, a software firm subleasing office space from Pollen at its LA headquarters sued the company after it learned that Pollen executives had not turned over rent payments to the building’s master landlord. It also tried to get a court order preventing Pollen from drawing down from a bank account containing $222,000 that was meant to serve as a security deposit. Beginning in 2022, Pollen also faced a series of lawsuits from vendors who alleged the company had not paid for various services it had contracted to receive. In July, Pollen was sued by the Swimming Swan lifeguard company in San Diego County Court over an unpaid $44,000 bill.
That complaint, written by attorney William Browning, alleges Pollen “has a history of promising to pay vendors and contractors for goods and services and failing to do so. POLLEN similarly sells tickets to events, but when the events are cancelled or rescheduled, POLLEN fails and refuses to provide refunds despite the express promises it makes before ticket purchase and after cancellation, to promptly refund customers. Upon information and belief, plaintiff believes that Pollen’s modus operandi is to put on events based upon promises to pay vendors and contractors, without the ability to pay those vendors and contractors, and with no reasonable belief that those vendors and contractors will be paid upon the agreed terms.”
“We strongly refute your claim that we knowingly put on events without the intention to deliver or pay,” said a Pollen spokesperson. In the last 12 months alone, we’ve run 360 experiences. We’ve had to cancel 39 experiences in the last 12 months due to COVID-19 restrictions and in all cases customers are refunded.” Futher, spokesperson said that, “our refund policy is within 90 days. Looking at refunds paid since 2020, we have delivered on this promise more than 90% of the time.”
In a separate dispute with vendor HADCO Staffing Solutions over an unpaid bill of $22,000, Pollen agreed to make eight payments of $3,700 a month beginning July 1, 2022. But when it came time to make the first payment, Pollen officials let the deadline pass and allegedly didn’t return phone calls from HADCO executives inquiring about the whereabouts of the money.
Days later, HADCO filed suit.
Editor’s note: This article has been updated with Pollen’s responses to some of the allegations made against the company.