None of the creditors are listed in the first report, bar major shareholder Bartok International.<\/p>\n
In 2020, the NZ Police trialed a virtual police officer, “Ella”, made by Soul Machines, to field queries from the public. Like avatars made by the company for Air New Zealand and ANZ, it never made it past a pilot. <\/p>\n
In an earlier statement to the Herald, KPMG said it was a voluntary receivership, after a process that had included an attempted sale.<\/p>\n
\u201cThe receivers intend to progress with the existing sales process and seek to find a buyer for the business and assets of the company,\u201d KPMG said.<\/p>\n
Soul Machines’ website this morning (April 11) shows its operations still offline, as they have been since receivers were appointed on February 5.<\/p>\n
Cash in the bank and estimated intellectual property figures have been withheld from Bower and Norman\u2019s first report as the attempt to sell the company continues.<\/p>\n
The pair say they have also retained \u201ckey staff\u201d as the sale process continues. The report does not say how many. It does say the receivers anticipate, at this stage, that preferential claims including wages and holiday pay will be paid in full.<\/p>\n
Staff already gutted<\/p>\n
There were signs of trouble in mid-2024 as accounts filed in the UK showed cash and equivalents of $12.3m and net cash outflows of $38.1m for the year ending March 31, 2023. (Soul Machines was deregistered in the UK in September 2024.)<\/p>\n
Soul Machines\u2019 headcount reduced from 253 in July 2023 to 70 by July 2024, according to LinkedIn Premium\u2019s Insights tool, which also shows new hires tailing off after December 2022.<\/p>\n
Immediately before the receivership, 45 staff were listed, including 15 in NZ.<\/p>\n
Hero customers bail<\/p>\n
Key early customer Mercedes-Benz had sold most of its stake and dumped Soul Machines\u2019 tech by July 2024. Another hero customer, ANZ, had also ditched Soul Machines in favour of an inhouse-developed product. Air New Zealand also bailed.<\/p>\n
Meanwhile, British Virgin Islands-registered Bartok International \u2013 a firm with a subterranean profile \u2013 had emerged as the largest single shareholder. <\/p>\n
There was increasing competition in the world of AI-powered chatbots. Many of the newcomers did not have Soul Machines\u2019 emotional smarts or visual finesse, but experts say customers didn\u2019t care – as long as they were cheaper.<\/p>\n
Clare Capital managing partner Mark Clare said at the time, \u201cCompanies who\u2019ve had a credible standalone product for some time now find their offerings commoditised by the bigger players.\u201d<\/p>\n
Tech entrepreneur and Soul Machines co-founder Greg Cross.<\/p>\n
A product could still be excellent, Clare said, but now faced new, often cheaper competition from the likes of OpenAI – whose ChatGPT burst into the mainstream in November 2022 – Microsoft, Google, Amazon and Anthropic, and a wave of startups building apps that incorporate their generative AI tools.<\/p>\n
Before its receivership, Soul Machines had switched to selling avatars based on ChatGPT.<\/p>\n
Soul Machines co-founder Greg Cross, who earlier acknowledged a wave of layoffs in 2023, quit as chief executive in September that year.<\/p>\n
Fellow co-founder Dr Mark Sagar quit as a director in June 2024. Like Cross, he gave no reason for his departure and did not return requests for comment.<\/p>\n
In April 2023, Cross told Forbes Australia the explosion in popularity of chatbots had led to a \u201cchallenging time\u201d for companies in the sector.<\/p>\n
Dr Mark Sagar with Baby X, a computer-driven simulation based on his own daughter. Photo \/ Brett Phibbs<\/p>\n
Tim Warren, founder of AI chatbot and automation firm Ambit, said it seemed Soul Machines had shifted from being \u201ca very high-end, very expensive offering\u201d to a platform with consumer-friendly pricing. The firm didn\u2019t appear to have landed anchor customers, or enough of them, to justify its valuation.<\/p>\n
\u201cThey had unique IP and technology, but suddenly they\u2019re in a crowd with everyone else.\u201d<\/p>\n
While Soul Machines\u2019 avatars might be more emotionally responsive and realistic, many customers wanted \u201csomething cheap and commoditised\u201d, Warren said.<\/p>\n
Baby, I love your way<\/p>\n
Sagar, a former Weta Digital whizz, served as the tech brains, and serial entrepreneur Cross created Soul Machines in 2016 as a spinout from Sagar\u2019s work at the University of Auckland, where the academic created an AI-powered avatar of an infant, dubbed \u201cBaby X\u201d.<\/p>\n
The idea was to create digital on-screen \u201chumans\u201d who could help firms with customer service, complete with facial expressions to empathise with a customer\u2019s emotions.<\/p>\n
Early hero customers, investors disengage<\/p>\n
Soul Machines\u2019 latest extensive shareholders list, released on December 4, shows Mercedes-Benz with a 1.6% stake, compared with 4.4% in July 2023.<\/p>\n
The German firm took a 6% stake in the Kiwi start-up as it led the US$7m Series A round in 2018. <\/p>\n
At the time, Mercedes was billed as an anchor customer. Today, it is not listed in a roster of hero clients.<\/p>\n
Brands retire avatars<\/p>\n
ANZ, Air New Zealand and Mercedes-Benz were also promoted as partners \u2013 their respective Soul Machines developed avatars dubbed \u201cJamie\u201d, \u201dSophie\u201d and \u201cSarah\u201d. This led Newstalk ZB host Mike Hosking to say: \u201cDo you spot the problem? They\u2019re all women.\u201d Cross responded at the time that there were also male avatars; the choice sat with the client.<\/p>\n
A spokeswoman for ANZ told the Herald in July 2024 that while the bank worked with Soul Machines to create personal banking assistant Jamie from 2018, \u201cwe ceased this function for customers in early 2022\u201d.<\/p>\n
And while Air New Zealand\u2019s Sophie made her debut at an event in Los Angeles, the airline ended up going with its inhouse-developed Oscar, a much more straightforward effort. A spokeswoman said the airline is not using any Soul Machines technology.<\/p>\n
The December 4, 2025 Companies Office update has Bartok as the largest Soul Machines shareholder with a 28% stake.<\/p>\n
Minority shareholders (all 4% or below) included Sagar, Salesforce and Auckland University\u2019s commercialisation arm, Uniservices. <\/p>\n
Chris Keall is an Auckland-based member of the Herald\u2019s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.<\/p>\n","protected":false},"excerpt":{"rendered":"None of the creditors are listed in the first report, bar major shareholder Bartok International. In 2020, the…\n","protected":false},"author":2,"featured_media":373464,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[194903,194902,365,10007,363,364,1975,73774,154827,42503,6852,1874,5840,154828,13106,1132,111,139,69,194901,51386,26692,384,2552,4918,145,61,52193],"class_list":{"0":"post-373463","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-artificial-intelligence","8":"tag-194903","9":"tag-196m","10":"tag-ai","11":"tag-aipowered","12":"tag-artificial-intelligence","13":"tag-artificialintelligence","14":"tag-at","15":"tag-aucklandfounded","16":"tag-casualty","17":"tag-collapsed","18":"tag-customer","19":"tag-found","20":"tag-least","21":"tag-machines","22":"tag-maker","23":"tag-million","24":"tag-new-zealand","25":"tag-newzealand","26":"tag-nz","27":"tag-nzfounded","28":"tag-owe","29":"tag-owing","30":"tag-people","31":"tag-service","32":"tag-soul","33":"tag-technology","34":"tag-to","35":"tag-virtual"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/373463","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=373463"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/373463\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/373464"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=373463"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=373463"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=373463"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}