The Government's €250 million flagship Digital Hub project confirmed yesterday that its first major tenant, Educational Multimedia Group, had ceased trading.
The closure is a blow to the Digital Hub, which last month announced that another of its early tenants, a small e-learning firm called Unlimited, had been wound up.
Educational Multimedia Group, which also develops e-learning software, moved into the Digital Hub complex this year but failed to turn around its difficult financial position.
In 2001, the firm undertook a major restructuring, when it was forced to lay off 50 workers in Dublin. The latest financial returns for the firm - which was founded in 1997 by UCD graduate Mr Theodore Lynn - show it generated combined operating losses of $19 million (€16.9 million) during 1999 and 2000.
The firm did not return calls yesterday but it was reported in the online publication ElectricNews.net that management had told its 18 staff on Thursday that the firm would be wound up.
The closure is said to have been forced after the company's management met investors in an attempt to raise last-minute funding to keep the firm trading.
Educational Multimedia Group had built up a good reputation in the Republic and this year scooped the "e-learning firm of the year award" at the O2 Digital Media Awards. It provided online training to, among others, the Garda Síochána and Bank of Ireland. The firm's investors include British private equity firm 3i, AIB Capital, ICC and Independent News & Media, according to ElectricNews.
A Digital Hub spokeswoman said, while news of the closure was disappointing, it had to be realised that the current economic climate was challenging.
"We remain confident that the digital media sector will be an area of growth in the medium to long term and that the Digital Hub will be a catalyst for this."
The Digital Hub project has received €130 million from the Government to help redevelop several former Guinness buildings in the Liberties area. It is currently tendering to attract an extra €120 million private-sector funding to complete the site.
Earlier this year, the Digital Hub attracted its first five companies to locate at the site, including Educational Multimedia Group and Unlimited. Since then, the Hub has attracted a further three Irish companies: Journeyman Productions, Zenark and Pixel Soup.
The Digital Hub is seeking to attract a cluster of digital media and technology firms.
