MetaBrite laid off the majority of its employees last week as the Seattle startup struggles to find a new path forward amid what CEO Court Lorenzini described to shareholders as “extremely challenging circumstances.”
In an email to MetaBrite shareholders last week titled “We won the battle, but lost the war,” Lorenzini explained that an investor pulled the plug on its financing efforts.
“Without that ongoing financial support we can’t continue to function, and we’ve tried everything we could come up with to avoid a shutdown, but there is simply no way around it,” Lorenzini wrote in the Thursday email, which was obtained by GeekWire. “So effective yesterday, we ceased all operations of the company.”
In an interview with GeekWire on Monday, Lorenzini said that MetaBrite is still alive, even though it laid off eight employees last week.
He said the company, whose technology helps retailers draw insights from customer habits, now employs four people and is “currently exploring some new business opportunities.”
Circumstances appear to have changed since Lorenzini penned Thursday’s memo, with some hope of a business pivot. He said the company ceased operations of its receipt processing line of business. It’s unclear how MetaBrite plans to change course, and Lorenzini declined to comment further on the matter.
In the memo, Lorenzini — who previously co-founded electronic signature powerhouse DocuSign — cited a number of factors that hurt MetaBrite, including discounted pricing that increased the monthly cash burn rate and uncertainty around ownership of data rights. Even if the company landed some key business deals, Lorenzini — citing the logic of a MetaBrite investor — wrote that the company would still be going out to raise its series B venture financing with “a revenue line that showed terrific growth through 2017, then a total crater in Q1/Q2 2018, and only a very slight recovery starting.”
The fear was that the company would simply run out of money before it could bring in the series B round of funding.
Another factor cited in the memo was the situation involving Facebook and Cambridge Analytica, which raised larger issues for MetaBrite around consumer data rights. Strict policies such as the European Union’s General Data Protection Regulation are taking root, and may spread to the U.S., which could have a negative impact.
“The bottom line is that it is only getting harder to get data rights for consumers, and in the next 12-24 months, there might be no way for a company to agree to grant those rights to us at all,” wrote Lorenzini.
Founded in 2012 by Lorenzini and former HP vice president of design Sam Lucente, MetaBrite raised nearly $20 million from Acorn Ventures and others. It already altered its business offering, once before.
The company originally started as CookBrite, a mobile meal-planning solution targeted at consumers. But it pivoted in 2016 with a new focus on building a data intelligence platform for business customers.
“We started with a simple goal in mind: leverage technology and great design to get a more complete, long-term picture of purchasing behavior across millions of distinct households,” the company writes on its website. “Enabling our clients to access the most accurate consumer purchase data, on demand, and for lower cost than ever before, MetaBrite takes business intelligence to a whole new level.”
In the memo to shareholders, Lorenzini noted that things just didn’t work out as planned.
“This is an extremely sad day for me and all of us, and one that I truly believed that we could avoid. But the sad truth is that I couldn’t argue with his logic,” Lorenzini wrote, in reference to a MetaBrite investor who raised concerns about the company’s prospects.
According to PitchBook, the company’s investors include venture capital firms like 415 Investments; Acorn Ventures; Archangel Venture Capital; Camp One Ventures; and Tappan Hill Ventures. Angel investors Gary Rubens, Grace Stanat, and Owen Van Natta also backed MetaBrite. The company employed 40 people in June of last year when it closed its Series A investment round.
Lorenzini helped launch digital signature giant DocuSign in 2003 and left the company in 2008 to start Primus BioVision. DocuSign filed for its IPO last week.