AI infrastructure startup SQream heads for sale after collapsing under heavy debt
The company, which develops GPU-based data processing technology, accumulated losses of more than $100 million.
The Tel Aviv District Court appointed a temporary trustee for high-tech company Scailium (formerly SQream) last week after it accumulated debts of more than NIS 13.6 million (approximately $4.7M), and today (Monday) authorized him to begin efforts to sell the company. Judge Hagai Brenner appointed Attorney Evitar Kramer of the Weksler Bergman & Co. law firm as temporary trustee. Earlier Monday, the trustee submitted an initial report requesting court approval to publish an invitation for bids to purchase the company or its operations.
Judge Brenner approved the request, after the trustee noted in his report that “there is an extremely urgent need to initiate the company’s sale procedures … even before the inquiries regarding the possibility of operating the company as a going concern are completed.”
Scailium (formerly SQream) last week applied to the Tel Aviv District Court for an order opening insolvency proceedings to examine the possibility of economic rehabilitation and the appointment of a temporary trustee. “The applicant company has accumulated losses totaling more than NIS 300 million ($104M) by 2023, alongside debts amounting to more than NIS 13.6 million, and is unable to meet its current and future obligations,” the application states.
The application states that the company developed significant technology in the field of AI infrastructure and raised tens of millions of shekels from investors. Founded in 2010 under the name SQream, the company is an Israeli software firm specializing in data processing and high-performance computing infrastructure, particularly for large-scale data analysis and artificial intelligence applications.
In the filing submitted through attorneys Idan Adler Reis and David Zanani of Furth, Wilensky, Mizrachi, Knaani, the company states it has developed GPU-based technology designed to accelerate data processing and improve efficiency in advanced computing systems, especially in environments where traditional architectures create bottlenecks and underutilized compute resources.
In recent years, SQream has focused on licensing its database and analytics software, with headquarters in Israel and commercial activity primarily in North America and South Korea.
The company argues that the ongoing war in Israel over the past two and a half years has also made it more difficult to raise capital from foreign investors. Given its cash flow constraints and the risk of further asset erosion, management concluded it had no choice but to turn to court in order to preserve assets and enable an orderly sale process.
The company currently employs approximately 50 workers.
