Syncapse Is In Bankruptcy After Laying Off Most Of Its 100-Person Staff
The move suggests that the economics of social media marketing, absent being acquired by a bigger company, are more difficult than they may appear. Buddy Media and Marin Software, two competing companies, also recently revealed they were not profitable. Buddy Media was acquired by Salesforce, and thus non-profitability isn't an issue at that company. Marin went public and has financing. How long investors will tolerate its losses is an open question.
CEO Michael Scissons did not return two messages requesting comment. Scissons knew Facebook intimately. He was the Canadian director of Facebook media sales for the Interpublic ad agency network, starting in early 2006 — years before others realized Facebook would be an ad medium.
Syncapse is Canadian, so it filed as a foreign company. It listed 100 - 200 creditors and $10-50 million in assets. It claimed liabilities of $1 million - $10 million, according to the court file.
The company laid off a majority of roughly 100 employees a few days ago. The company has 154 employees in total throughout the globe.
Syncapse had raised $45 million (Canadian) from ABS Capital and Panorama Capital, but that was not enough to tide it through. The company had $9 million in revenue in 2010 (but lost $1.5 million on the bottom line), $12.9 million in 2012 (but lost $12.3 million), and $6.5 million in the first eight months of 2013 (but lost $6.3 million), according to court documents and Bloomberg.
It had a $200,000 weekly burn rate, the court filing states. Syncapse had taken a $2 million loan from BDC Capital, but on July 18, BDC demanded a default payment of $1,883,390. When Syncapse was unable to pay, it filed for court protection.
Syncapse listed US$1.54 million in cash, and approximately US$1.84 million in accounts receivable on its balance sheet, the court filings say.
Syncapse did not want for talent. Earlier this year, it hired Tina Daniels, the former director/global agencies at Microsoft, as its chief revenue officer. It had also acquired Clickable last year in a $50 million mostly stock deal.