Appster, the 'next Apple' with two Gen Z founders, imploded into liquidation

Appster was founded in 2011 by Auckland-born Josiah Humphrey and Melbourne teenager Mark McDonald with just A$3,000 in savings, grew into an app developer once hailed as 'the next Apple', and put its founders on the Forbes 30 Under 30 Rich List in 2017 with an estimated US$43 million net worth. At its peak Appster employed 350 staff across four international offices and pulled in more than US$19 million in revenue.

In December 2018 it entered voluntary liquidation after what Humphrey called a dramatic deterioration of its financial position. 'Surprisingly we were in one of best cash positions the business had been in just four months ago but things spiralled out of control very quickly', he said. 'We missed forecasted sales targets by around 50 per cent four months in a row. With expenses of roughly A$1m a month cash reserves drained fast despite cost cuts.' He also blamed a new tax applied retrospectively across four years, wiping out profitability through double taxation.

Clients complained of being left tens of thousands of dollars out of pocket for unfinished work — one called the output 'kindergarten stuff'. Humphrey rejected the quality claims, noting most contracts were fixed-fee with payment only on client acceptance, and said the founders were focused on transitioning client projects and helping staff find industry jobs.

A cost base of roughly A$1 million a month against fixed-fee contracts meant four consecutive months of 50-per-cent sales misses drained reserves before cuts could catch up.

The business had been structured on professional advice around a tax that was later applied retrospectively across four years, eliminating profitability through double taxation.

Revenue concentration in bespoke app builds with payment only at client acceptance left the company carrying work-in-progress costs when demand fell.

Growth had been celebrated externally (Forbes rich lists, 'next Apple' headlines) without the cash discipline to survive a single quarter of weak sales.

Fixed-fee client work plus A$1M monthly burn leaves no buffer: a 50-per-cent sales miss for four months converts a celebrated agency into a liquidation faster than reputation can warn anyone.

Liquidators were appointed on the Friday of the collapse. Melbourne-based developer Elegant Media publicly offered Appster's stranded clients free assessments of their unfinished projects and completion at cost, estimating the assets at A$2-3 million, and said it had capacity to hire Appster staff. Humphrey posted reflective messages on LinkedIn in the weeks around the collapse, writing that founders were 'absolutely devastated'.