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Contour6With a bid of $1.925 million, investment company Clarke Capital Partners has emerged as the prevailing bidder for the assets of Contour Inc., the Seattle-based action-camera company that abruptly closed its doors in August in the face of tough competition from its larger rival GoPro.

The sale, which resulted from a competitive auction by a court-appointed receiver, has been approved by the court but still needs to be finalized by the parties.

Clarke Capital is an existing Contour investor. Assuming everything goes through, Clarke Capital plans to bring back the Contour business and brand, confirmed James Clarke, the CEO and managing partner of the Utah-based investment company, speaking with GeekWire via phone this morning.

Clarke acknowledged that part of the investment firm’s motivation is preserving the capital it has already invested, but he said Clarke Capital sees itself as a business operator first, and an investor second.

“We think it’s a great business,” Clarke said of Contour. He said he believes the company is positioned to be “a great Pepsi to GoPro’s Coke, and it deserves an opportunity to resurface.”

barrosgreen
Jason Green (left) and Marc Barros co-founded what became Contour as University of Washington students who wanted to record video on the slopes.

The struggles of Contour highlight the intense competition in the market for wearable cameras, used by mountain bikers, snowboarders and other outdoor sports enthusiasts to capture point-of-view footage of their escapades. That competition will only escalate as general-purpose competitors such as Google Glass enter the market. Contour defaulted on nearly $7.5 million in loans prior to closing.

Some of the former employees of Contour would be offered a chance to return to the company if the sale goes through, but overall it would be a “much lighter organization,” Clarke said.

Clarke said he loves Seattle, but added that it may ultimately make more sense to locate the new Contour in Utah, given Clarke Capital’s presence there. A final decision on the location hasn’t been made, he said.

Apart from formalizing the asset sale, another outstanding issue that needs to be resolved is the status of more than 32,800 Contour cameras held by PCH International, the product development company that oversaw the manufacturing of Contour cameras under an agreement with the Seattle company.

jamesclarke
James Clarke (via LinkedIn)

Those cameras held by PCH are specifically excluded from the assets to be sold to Clarke Capital via the court-appointed receiver. Clarke said his company is in discussions with PCH about the situation, and is hopeful that they can reach an amicable resolution.

PHC said in court filings that it reserved the right to sell the Contour cameras on its own to help make up for what it estimates to be its $3.6 million in damages in the Contour case.

According to court records, competing bidder Industrial Revolution offered $2.075 million for Contour’s assets, but its bid would have included Contour’s accounts receivable, which were excluded in Clarke Capital’s bid — making the Clarke Capital bid effectively higher.

Contour, founded in 2004 by Jason Green and Marc Barros, faced stiff competition from GoPro, whose parent company Woodman Labs raised $200 million from Foxconn last December in a funding round that valued the venture at $2.25 billion. Contour raised total venture capital of around $16 million, and Green said after the closure that he believed Contour’s location in Seattle factored into that disparity.

“We’ve been a hardware company in a software town,” Green said at the time, saying it was difficult at times to get the attention of the region’s software-oriented investors.

Clarke said this morning that he hopes to honor the original vision of the company’s founders. Green remained with the company prior to its closing, and Barros had left the company earlier this year.

We’ll continue to follow the Contour story as it unfolds. Many Contour customers have been emailing GeekWire about the status of cameras that they had sent in for repairs, and we’ll also provide updates on that issue as we get details.

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