Mundo Media, was a company that had more than 100 employees and offices around the world, direct relationships with big advertisers, central boosts at all major summits and marketing events, 5-star ratings at many affiliate portals and blogs, BUT also had a debt of about $26 million to the Royal Bank of Canada.
Why this happened?
Because of huge amount of bot traffic and loss of large advertisers.
Mundo Media tried to prevent crisis by reducing the number of personnel to 45 employees and cutting expenses. Negotiations on partial or full acquisition began in January 2019 and some companies even have shown interest in acquiring assets, but none of them made a final proposal.
In order to continue working, Mundo Media needed to pay just $900.000, however, no payments were made, and the bank, together with Mundo LTD and the consulting company FTI, began the transition to external management, choosing Ernst&Young as the managing company.
On April 9, the Supreme Court of Ontario decided that Mundo LTD, being unable to pay debts to the bank and would be taken over by the auditing company Ernst&Young.
This means that Mundo Media is in fact bankrupt. Ernst & Young may dispose of all the assets, resources and intellectual property of the company. However, the main purpose of this procedure is to close the debts to the bank, so, most likely, the assets will be sold out. The question is what assets may be in the network remains open. Whether affiliates will receive the invested money – time will tell, but it’s probably not worth hoping for.
For the affiliate marketing industry, what conclusions can we make?
- Even large companies like Mundo Media are not insured against financial difficulties.
- It’s important to follow the market trends. And always be ready to switch to new trendy verticals.
- Fraud can cause the collapse of the company, no matter how big and successful it may be.