Totsy burns through $34 million, lays off its 83 employees, selling assets
New York-based flash sales site Totsy is laying off its staff of 83 employees. The company, which had 110 employees last year and 4 million email subscribers, has entered liquidation, hiring the investment bank Consensus Advisors to sell off its assets, which includes the member list and $2 million worth of inventory.
According to sale documents obtained by PandoDaily, the company hit $16.9 million in revenue last year and never turned a profit on its flash sales. It lost $22.9 million in 2012 and projects a loss of $16.8 million this year. Totsy converted 10.8 percent of its email subscribers to customers over the last 24 months, a figure which was smaller in 2012. (For context, that’s not great. Ecomom, a comparable business which also shut down, had a conversion rate of 28 percent, according to liquidation documents.)
Anecdotally, Totsy didn’t seem to have glowing reviews from mom bloggers either. News of the layoffs was first sleuthed out via regulatory filing by Crain’s New York.
Totsy, founded in 2009, replaced founding CEO Guillaume Gauthereau in April. But as it was seeking to raise more capital, investors Rho Capital Partners and DFG Gotham Ventures proved unwilling to throw good money after bad — Totsy had raised $34 million across three rounds of funding. Sale documents reveal that investors injected an unannounced $11 million into the company in November 2012, just three months after Totsy’s $17.6 million Series B.
Totsy built its membership list by purchasing names and email addresses through two acquisitions. In 2010, the company acquired 82,000 names from bTrendie, a site it wound down. In January 2013, the company acquired 2.4 million names from Mamapedia for $895,000. Given the news of the layoffs, the email list will likely be all that survives the company.
Ecommerce is a resource-intensive business which involves lots of risk in taking on inventory. Beyond that, flash sales sites as a category have lost their luster. For example, Gilt Groupe went through a rocky period of layoffs and restructuring, although my understanding is that the company has righted the ship and should file for its long-anticipated IPO any day now. Lot18 has gone through several rounds of layoffs, eventually pivoting from one fad commerce business model (flash sales) to another (subscriptions). Rue La La laid off 65 employees when its parent company GSI merged with eBay; the company recently replaced its CEO. Smaller players have quietly shut their doors and sold their customer lists to the dominant market players.
Despite the shakeout, a few winners have somehow managed to survive the backlash and thrive. OneKingsLane, Zulily, and Fab are often held up as shining examples of flash sales done right, perhaps because they’ve diversified away from the category. The artificial deadline of a limited, one-time-only sale seems to work for some, but when it doesn’t, it’s a disaster.
Totsy’s site, which is still operating, is a membership-only flash sale site targeted at moms with an eco-friendly bent. It was a direct competitor of Seattle’s Zulily, which appears to be thriving. Zulily has raised $135 million in VC funds; the latest was at an eye-popping $1 billion valuation on $500 million in annual revenue.
Totsy and Consensus did not respond to messages.
Erin Griffith
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13 Highlights From One of the Biggest Furniture Fairs in the Country
ICFF—or the International Contemporary Furniture Fair—is one of the biggest furniture shows this side of Milan. And like its Italian rival, ICFF is closely watched by critics, who see it as a gauge of broader cultural trends. For example, the glitzy 2000s correlated with escapism from political turmoil and war. The post-2008 fair was full of inexpensive, DIY projects, supposedly reflecting life after the recession. Last year, as the recovery took hold, critics saw a resurgence of excess and glamor.
In reality, the cycle of designing and manufacturing furniture doesn’t always match up perfectly with culture at large. But it’s still fun to try to connect them, even just a way to make sense of the dozens of parties, hundreds of objects, and thousands of sales reps.
So what did 2013 hold in store? Well, for one thing, it was the most unpretentious fair in recent memory. It incorporated smaller shows from outside Javits Center, like Wanted Design, which gave the whole thing the feeling of a big gallery walk. It was also hard to ignore the playfulness of it all, evinced by things like a super-minimal deck of cards, musical shower heads, gem-colored city bikes, and lights that you have to play with to turn on (check out our GIF below). It was delightfully void of any platitudes about culture at large or the economic climate—instead, people celebrated objects either because of their simple intelligence, humor, or beauty. Sometimes, furniture is just furniture.
H-slm/f Chair by Marka Moderna
This chair by the Miami furniture manufacturer Marka Moderna strikes an interesting balance between retronostalgia (the Eames-like wire base) and contemporary details borrowed from aerospace engineering, like the monocoque seat, which is folded from a single sheet of fiberglass.
The Welles Lamp
Handmade by a pair of Canadian designers who go by Gabriel Scott, these bauble-like lamps are part of a larger collection of furniture that's based on complex tessellated geometries.
Kohler Moxie Showerhead
Kohler's play for the youth market? The Moxie, a Bluetooth-enabled shower head that streams music for up to seven hours on a single charge.
The Tri Light by Aaron Leah
Tri Light is an interesting little piece of user experience. It doesn't have an on/off switch; rather, just lift the wood-encased light source up on its tripod base and it turns on, thanks to a motion sensor. Set it back down to turn it off.
The Mini by OMA
"No one has ever improved upon the violin makers of Cremona over 300 years ago, and the same can be said for the professional audio equipment made for cinemas and studios in the 1930's through the 1950's," explains the designer behind OMA, a company that makes old-timey horn loaded loudspeakers, field coil and full range speakers, and tube amplifiers that stray perilously close to steampunk. But there's also an authenticity to these babies—and it's hard to argue with the sound, which is rich and crisp.
Carlo Aiello's Parabola Chair
When I saw Carlo Aiello's Parabola Chair online last week, I shook my head. How could that seat, despite its charm, be comfortable? Or even usable? Well, I'm here to report: this graceful wireframe sculpture is very much a functioning chair.
Patrick Townsend's SuperString Series
These handmade lights are a quirky little play on traditional string lights. Rather than a proper wire of evenly-spaced bulbs, we get tangles of all shapes, sizes, and colors of bulb—all handmade in Long Island City, Queens.
Bike ID
Reps from Bike ID, the Swedish city bike company, were on hand to introduce the brand in the US. The single speed and cruiser alloy frames are pretty standard, but a crazy SRAM two-speed hub, which shifts gears automatically based on speed, makes it notable.
Iota by Joe Doucet
Joe Doucet's minimalist playing cards, which Gizmodo covered
Baccic Glasses by Joe Doucet
Another solid contribution from Doucet, these dada-ist glasses seem normal enough—until you realize there's no flat bottom to set them down. You either finish you drink, or you spill it. Your choice.
Molo Design
Molo Design is a pair of Vancouver architects who make furniture, wall dividers, and lamps out of a fire-retardent paper. The honeycomb structure they've developed folds flat like an accordion, but expands into a surprisingly structurally sound platform—it can even support the weight of a human.
Symbol Audio's Stereo Console
Remember Symbol, the handcrafted audio designers Gizmodo's Adrian Covert profiled
Clamp Mini by Dana Cannam
Dana Cannam's popular Clamp lamp, which lets users adjust the height of the light by strapping the cord around the post, was reimagined as a desktop lamp and a floor light for ICFF.
Report: NY State puts kibosh on RelayRides car-sharing service
Filed under: Etc., Government/Legal
Three-year-old peer-to-peer car rental service Relay Rides has run into a rough ride in New York, accused by the state's Financial Services Department of "repeated false advertising and violations of insurance law."
The two sides present different takes on what's happened - a state official makes it sound like Relay Rides willfully misled consumers when it told them "that they would not be liable for out-of-pocket expenses in the event that their car was stolen or involved in an accident," because the company's insurance isn't approved by New York. Relay Rides, which operates nationwide, has said that it works to make sure it abides by state laws but learned from the Financial Services Department that there was "noncompliance with certain unique aspects of New York insurance law."
While the quarrel is sorted out, Relay Rides has said it will discontinue the service in New York but that any existing reservations will be honored.
NY State puts kibosh on RelayRides car-sharing service originally appeared on Autoblog on Wed, 22 May 2013 08:01:00 EST. Please see our terms for use of feeds.
Permalink | Email this | CommentsTalk Show Subway Car
Improv Everywhere confuses and amuses New York Subway passengers once again, this time setting up a late night talk show on a random subway car. Though it might have been more entertaining without pants.
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PandoMonthly New York with Chris Dixon, the full interview
It’s hard to categorize Chris Dixon. He’s had experience as an entrepreneur, an angel investor, a venture capitalist, and a blogger. He’s often cited as “one of the most vocal advocates of the New York tech scene” but is currently living and working at Andreessen Horowitz’s office in San Francisco. And he was our guest during this month’s PandoMonthly event in New York, where he discussed all of that and more. (How’s that for a segue?)
Dixon explained the difference between consumer Web startups and enterprise companies, discussed technology’s shift from Silicon Valley to “application cities” like New York and Los Angeles, offered his perspective on bitcoin and how the press often “misframes” the technology-slash-currency, and why it’s important for venture capitalists who don’t live in the Valley to build a community through blogging.
The full interview is available for streaming below. We’d like to thank Gravity for sponsoring, and Projective Space for hosting, last night’s event.
(Disclosure: Dixon is a personal investor in PandoDaily and is a partner at Andreessen Horowitz; Jeff Jordan and Marc Andreessen, who also invested personally in PandoDaily, are also partners at the firm.)
Nathaniel Mott
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Electric Daisy Carnival New York: Day 1 Photo Recap
We spent our first day at EDC NY braving the massive crowd and the scorching heat as it bounced off the asphalt of Citi Field’s sprawling parking lot. Sampling the sounds and styles of the festival’s 5 diversely-curated stages, we found ourselves gravitating most to the Neon Garden tent. Tucked away deep in the corner, techno faithfuls sought shelter from the packed crowd, and sweltering heat that plagues the festival’s other stages.
Hop past the break to see EDC NY through our eyes.
Damian Lazarus takes a drag as he showcases new cuts from the Crosstown Rebels crew to warm up the Neon Garden crowd.
Danny Avila’s electro-centric set turned the Circuit Grounds into a steam room under the midday sun.
Mark Knight brought tech house to the Kinetic Field – extending his set over his scheduled hour after Chuckie got stuck in Manhattan’s midtown traffic.
This is what we call dedication.
EDC’s famous art installations were spread throughout Citi Field’s parking lots, giving fans more than just music to keep themselves entertained.
Canadian bass duo Zeds Dead changed the pace up at Kinetic Field with their unique brand of hip-hop infused dubstep.
Seth Troxler kept things SUPER weird under the Neon Garden tent.
R3hab gets airborne at the Circuit Grounds.
Ghost producer turned deep house phenom Maceo Plex twisted and contorted an atmospheric soundscape at Neon Garden.
La Roux performed her heavily remixed originals as the sun began to set on Citi Field.
Dubfire flexed his tech muscles, setting the stage for Richie Hawtin’s closing set.
Nicky Romero turned the energy up to 11 during his sunset set at the Circuit Grounds.
Borgore reminded fans that b*tches love cake at the bone-rattling Basspod stage.
Eric Prydz continued to assert his inevitable dominance of cerebral progressive house.
Headhunterz followed up Steve Angello with a breakneck-paced hardstyle set, sparking a fuse that set off the day’s most explosive crowd.
Closing out the ENTER stage, Richie Hawtin pieced together a flawless set of minimal techno.
ATB belts out “Smells Like Teen Spirit” during his closing set at Kinetic Field.
View the full album from Day 1 on Facebook.
The center of tech is shifting from Silicon Valley to “application towns” like New York and LA
There weren’t many entrepreneurs in New York City in 2006 when Chris Dixon was building software for a hedge fund. Interested in startup culture, he decided to leave the stability of a day job for the uncertainties of being an entrepreneur, and started his own company. This was long before “Tweet Tweet Boom Boom,” the 2010 New York magazine cover story announcing the arrival of New York’s tech scene. By all accounts, Dixon should have picked up and moved to Silicon Valley to built SiteAdvisor, his security company, but he chose to stay in New York.
He decided to start it here, he recalled at PandoMonthly NYC tonight, because he simply likes the city better. It wasn’t a conscious decision not to move to the Valley, but he didn’t encounter the typical drawbacks that companies face outside of Silicon Valley. The most common complaint is there’s no access to talent or capital, but he didn’t encounter that problem at SiteAdvisor nor at his second company, big data machine learning company Hunch, which he launched with Flickr co-founder, Caterina Fake.
“It’s not easier to recruit engineers and raise money (in Silicon Valley),” Dixon said. The biggest benefit of being in the Valley is that, when adding employees number 50 to 100, it’s easy to find a person who has the exact specific experience you’re seeking. “You can just pull them off the shelf and slot them in” to the role,” he added.
His allegiance to New York is now slightly more nuanced with his new job. Last fall he joined Andreessen Horowitz as a partner. The firm requires its partners to be in the Valley, so he had to move. He joked that he was hoping his recent deal for New York-based Shapeways, a $30 million Series C, which is a greater financial contribution than all of his angel investing combined, would make up for his leaving.
That doesn’t mean Andreessen Horowitz isn’t a staunch believer in New York’s teeming tech scene. It’s simply a reflection of the firm’s worldview that venture capital is collaborative by nature.
“Everything you do is by definition a little crazy,” Dixon said.
If he’d struck his recent deal for drone company Airware from New York, his partners in Silicon Valley might not have gotten on board. But because Dixon was able to sit down with Marc Andreessen and toss around ideas, the deal for a company that makes operating systems for flying robots didn’t seem so far out.
Andreessen Horowitz has an inherent bias towards companies based in the Valley, but Dixon sees a shift to New York and LA. “New York is an application town as opposed to being an infrastructure town,” he said. “Just like you see a shift from the Valley to San Francisco, you see a shift to New York and LA as well. That is a big trend and will play in favor of New York, LA and other ‘application cities.’”
(Disclosure: In addition to being a personal investor in PandoDaily, Dixon is a partner at Andreessen Horowitz, whose partners Marc Andreessen and Jeff Jordan are also personal investors.)
[Illustration by Hallie Bateman]
Erin Griffith
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