British Cybersecurity Firm Goes Under Owing Millions

British Cybersecurity Firm Goes Under Owing Millions

An award-winning British cybersecurity firm has gone into administration owing £3.5m to unsecured creditors.

XQ Digital Resilience Limited, which traded as XQ Cyber, brought in administrators David Rubin & Partners after declaring bankruptcy in October by placing a notice in the London Gazette

The company was best known for developing CyberScore, a security testing and rating service that converts raw vulnerability data into more easily digestible security remediation and risk management plans.

According to a statement of affairs document published on the Companies House website this week and dated October, trade creditors are owed just over £500,000. 

The unsecured creditor who is owed the largest single sum of money by the Gloucestershire-based cybersecurity firm is an individual who made a £2.4m loan to the business. He was listed as someone who had significant control of the business in January 2017. 

Aside from this individual investor, HM Revenue and Customs is the largest creditor, left out of pocket for a total amount of £473,649. Five- and six-figure sums are also owed to a small number of tech suppliers. 

The statement of affairs estimates that assets totaling £304,374 are available to be used to pay back unsecured creditors. 

The administrators stated that while XQ Cyber's intellectual property and goodwill have a book value of £645,599, they expect to be able to use them to realize just £200,000.

The National Cyber Security Centre (NCSC)–approved company, which boasted many former GCHQ staffers among its employees, had gone through a recruitment drive in 2019 and made new hires just six weeks before going into administration.  

At XQ Cyber's demise, around 60 workers were made redundant, according to posts made on LinkedIn by former XQ Cyber staff members. 

XQ Cyber was featured as one of 20 UK security start-ups to watch in a profile in Information Age in June. The company's Twitter account has been inactive since November 7; however, its website—which states that the trading name of the company is now CS Information Security Limited—is still up and running.

The news of the company's decline took the cybersecurity industry by surprise, as public-sector UKCloud had reportedly added XQ Cyber’s CyberScore cybersecurity testing and rating tool to its portfolio in May, potentially creating a lucrative sales channel.

Source: Information Security Magazine