Monday 17 February 2020 9:32 pm

City grandee Michael Spencer among losers after collapse of startup Laundrapp

City grandee Michael Spencer has lost millions after a laundry startup he was a key backer for went into administration on Friday.

Laundrapp was sold in a pre-pack administration on Friday after running out of cash.

Spencer’s private investment group IPGL was a cornerstone investor in a £4m 2015 funding round in Laundrapp in which he also invested on a personal basis.

Other backers included Jeff Blue, the former strategic development director at Sports Direct who in 2017 lost a £15m court case against Mike Ashley after claiming he was promised a bonus during a night of drinking.

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Laundrapp’s backers refused to put more money into the business in recent months as it struggled with cash flow.

Former Tory treasurer Spencer netted £670m when the financial broker he founded Nex was sold to futures exchange CME Group in a £3.9bn deal in 2018.

In 2015 Spencer said: “I wish Laundrapp had existed when I was a young broker. It would have made my life so much easier. So when they pitched the idea to me I was hooked right away and I am convinced this will be a big success.”

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Alastair Massey and Tony Wright, partners insolvency firm FRP, were appointed as joint administrators to Laundrapp on Friday.

The business was immediately sold to Labs Project 1, a special purpose vehicle, for an undisclosed amount.

Massey said: “Laundrapp is a hugely exciting UK tech business, but had run into financial difficulty in recent months and without further investment would have been forced to cease trading.”

Spencer was contacted for comment