A once-hot startup that raised $4 million and rejected a $40 million Twitter acquisition just shut down

Frontback is shutting down August 15, after raising $4 million and stepping away from an acquisition offer from Twitter.

The once-hot selfie app let users take a picture with the front camera and back camera. The app then merged both photos into a single image.

The company took off after taking the stage at Tech Crunch Disrupt SF in 2013 and revealing that it had more than 200,000 downloads in a month - including users like the Prime Minister of Belgium and Ashton Kutcher.

Frontback raised $3 million for the company soon after the Tech Crunch appearance, according to a source close to the company.

The money had already hit the wires when Twitter took interest in the selfie app. There was never a formal offer letter or term sheet to acquire the company, said the source, but it had advanced to the point where the company was in the room talking to then-CEO Dick Costolo.

However, Frontback walked away from the $40-50 million Twitter was thinking about offering because its co-founder Frédéric della Faille thought the company was still on an upwards trajectory, riding on its demo day high and funding round, according to the source.

Nearly two years later, Frontback is shutting down.

At a time when Silicon Valley lore is brimming with stories of companies like Facebook and Snapchat, which rejected early acquisition offers and went on to become massive hits, the demise of Frontback offers an interesting counterpoint.

Back to its history

Frontback almost never existed in the first place. The app's co-founder and designer, della Faille, had been working on a Tumblr competitor called CheckThis.

After playing around with mashing up his photos and only a few weeks worth of money left in the bank, Faille decided to drop working on CheckThis and focus his team on this front-and-back selfie project. Faille did not return request for comment.

Frontback grew quickly, attracting investors like Ashton Kutcher and Alexis Ohanian, and all signs pointed to the up-and-up as competitors like Snapchat were also seeing rocket growth and money pouring in.

It was during these heady times that Frontback rebuffed Twitter's overtures, hoping to build the company into something bigger, according to the source.

Hype, though, always wears off after the initial spike.

By the time Spencer Chen, the former head of marketing for the startup joined at the end of the 2013, user retention had already become a problem.

"When I got there in late December or early January, the hype was starting to wear off," Chen told Business Insider. "It was like tequila where people tried it once and didn't like it again."

The team focused on keeping users coming back by introducing features like a feed of photos around the world, similar to what Snapchat has now with its public stories. But it never managed to create the kind of network effects that have other social networks benefit from.

"We saw pretty addictive usage from a set of users, but it just never broke out to the mainstream," Chen said. "We had a very tight community of hundreds of thousands users."

Failing to win the selfie war

Wheras Snapchat started with the ephemeral, disappearing message, it now has chatting, live video, public stories, a news network and ways to send money to each other with Snapcash. As a result, it's now worth $15 billion.

Frontback, in comparison, lacked things like filters and video, which even come standard on an iPhone camera now.

In della Faille's letter to Frontback users, he acknowledged that his company did not win the war.

"Frontback started exactly two years ago with the simple idea to capture a moment. No vanity numbers, no filters: it's "me now" - at the center of Frontback is you, your everyday moments happening now," della Faille wrote in the good-by letter. "This was a fresh idea and truly the heart of our vision, a concept that's seeing massive adoption today. Unfortunately, Frontback is not the winner."

It doesn't mean that della Faille is necessarily over. Chen thinks the founder will likely repeat history like he did with Checkthis and retool the team to look for the next big hit.

"They realize it's not going to get there and they'll re-spin that into something else," Chen said. "It just shows you how tough it is to crack the code of the consumer psychology. When you get a hit like this, you have to keep evolving it very quickly."