The CEO of collapsed property investment advisory Dashdot says it is working to shield clients from the financial fallout, after declaring the startup fell victim to brutal economic conditions, federal budget reforms, and changes to Meta’s advertising system.
Dashdot fell into voluntary liquidation last week, with the seven-year-old company appointing Teneo’s Rebecca Gill and Martin Ford to oversee its affairs.
The collapse left some customers, who paid thousands of dollars in upfront fees for Dashdot’s services, waiting for answers – and likely to lose the money.
The business previously said its most popular service carried a flat fee of around $25,000.
Speaking to SmartCompany, CEO and cofounder Glenn “Goose” McGrath said work is underway to ensure those clients have their contracts serviced by other agencies.
“We have reached out to the broader property investment services community, and we’ve asked for help, and the feedback has been honestly inspiring,” he said.
More than 50 companies have reached out to Dashdot, said McGrath, who hoped to transfer all clients with outstanding service obligations to a new company.
“Myself and [co-founder Gabi Billing] have lost everything in this process, we’ve lost our company, we’ve lost our income, we’ve lost everything,” he continued.
“We’re in this too. But right now, the single thing that we are focused on is getting as close to 100% of our clients out of harm’s way, and getting them to someone who can facilitate the service, or a similar service, to what they signed up to Dashdot for.”
‘Complex’ factors
Dashdot’s voluntary liquidation came less than two weeks after making more than 40 staff redundant.
In his open letter, McGrath described the redundancy round as part of an attempt to reduce costs and stabilise the business.
Dashdot built a national profile, helping Australians build property portfolios, offering services ranging from investment planning through to property acquisition and portfolio support.
But in the letter, McGrath said overlapping economic and strategic factors contributed to the collapse.
These included the federal government’s proposed changes to negative gearing and capital gains tax concessions, as well as changes to Meta’s advertising platform that increased customer acquisition costs.
“For nearly 30 years, the architecture of Australian property investing had rested on two assumptions: that capital gains would be taxed at half the marginal rate, and that the cost of holding an investment property could be offset against salary income,” McGrath wrote.
“The May 12 budget removed both for future investors.”
These comments come as Labor faces growing opposition from investors, founders and business groups over its proposed tax reforms, which would limit negative gearing on future purchases of established properties and replace the existing 50% CGT discount with an indexation-based model.
A Senate inquiry has also been launched into the CGT reforms.
However, McGrath stressed the budget announcements alone were not the determining factor that tipped Dashdot into liquidation.
“You could say that is potentially the straw that broke the camel’s back, but it is not the reason,” he said.
“So we are not taking a position that the budget came out, and therefore our business failed. That’s not the case, that’s not what we’re saying at all.”
In the letter, he also acknowledged Dashdot had become overly reliant on paid Meta advertising and lacked the balance sheet strength needed to absorb a series of external shocks.
“Our balance sheet wasn’t robust enough to withstand external shocks of this magnitude.”
McGrath said the company had attempted to recapitalise the business and was exploring merger, sale and acquisition opportunities ahead of the voluntary liquidation.
“By early April, business conditions had deteriorated so quickly that it became unfeasible to find investors who wanted to participate in the round,” he wrote.
He said discussions with other businesses that could potentially support existing clients remained ongoing.
The company was once recognised as one of Australia’s fastest-growing property advisory firms.
In 2023, Dashdot reported annual revenue of $11 million and employed staff across Australia and overseas through a fully remote operating model.
It was also named among the AFR‘s Best Places to Work list, promoting initiatives including unlimited annual leave and flexible work arrangements.
McGrath described the liquidation as the end of a seven-year journey that helped more than 1,800 Australians purchase more than 2,800 investment properties.