Saturday, January 28, 2023
No Result
View All Result
  • Home
  • Recent
  • Business
  • Economy
  • Investing
  • Markets
  • Personal Finance
  • Retirement
  • Tech
  • Startups
  • Insurance
  • Market Research
  • Crypto
  • Home
  • Recent
  • Business
  • Economy
  • Investing
  • Markets
  • Personal Finance
  • Retirement
  • Tech
  • Startups
  • Insurance
  • Market Research
  • Crypto
No Result
View All Result
Home Startups

Modsy quietly shut down while some customers were still awaiting refunds – TechCrunch

Updates Finance by Updates Finance
July 17, 2022
in Startups
0
74
SHARES
1.2k
VIEWS
Share on FacebookShare on Twitter


You might also like

Atomos tows a $16M load of funding to create tugboats in space • TechCrunch

Traits of an Entrepreneur | StartupNation

Google Forms cheat sheet: How to get started

In late June, Modsy, on online interior design services startup, abruptly ceased offering design services, laid off its designers, and left customers with unfinished renovations and project orders in process. The company returned some service order charges and promised to refund furniture deliveries to those who completed a form. But more than two weeks later, tweets show that many Modsy customers are still awaiting updates.

Unfortunately for them, Modsy has made it tougher to get in touch. While the company’s website remains operational, Modsy recently deleted its Twitter and Facebook pages and made its Instagram account private.

The reason is that Modsy quietly shut down in early July, founder and CEO Shanna Tellerman said to in an email to TechCrunch. Business of Home first reported in June that leadership intended to wind down the “corporate and legal entity of Modsy” and that most of the company’s e-commerce staff, engineers, and management had been let go. But Tellerman had declined to confirm this at the time.

“Capital constraints and uncertain market conditions forced the company to cease operations on July 6 and lay off all employees,” Tellerman told TechCrunch. Modsy’s assets were acquired by a “new entity” out of an insolvency proceeding, she added, and some former employees were hired by the entity to take the business in a “new direction.”

“Customers will be notified on next steps on how to address their needs,” Tellerman said.

The entity is Pencil, LLC, legally classified as a “general assignment for the benefit of creditors” — or ABC. (“Pencil” is a nod to Modsy’s legal name, “Pencil and Pixel, Inc.”). To form an ABC, a business — in this case, Modsy — enters into an agreement to assign its assets to a unaffiliated third party (e.g., Pencil) responsible for conducting the liquidation of the business. It’s not an untested strategy in the tech industry. E-ink smartwatch manufacturer Pebble went the ABC route when it shut down operations in December 2016. Ill-fated game streaming service OnLive also formed an ABC in 2015 to sell its technology to Sony.

ABCs have the advantage of allowing assets to be quickly sold, either for cash (to pay off creditors) or to sell the company to a new owner and keep services operating. The downside is, the equity of the original company — including any founder, investor, and employee equity — is wiped out. A former Modsy employee, speaking to TechCrunch on the condition of anonymity, said they were informed that their stock options are now worthless.

A link emailed to some Modsy customers directs to a form for claims “outside of [refunds],” including equity interest, wages, salaries, bonuses, severance, commissions, and contributions to an employee benefit plan. The wording suggests a process to recover money and benefits employees believe that they’re owed, but it’s unclear which claims, if any, will be successful.

Lennar, a homebuilder based in Fontainebleau, Florida, might be partially funding Pencil, according to the former employee. TechCrunch couldn’t independently confirm this and Tellerman refused to comment, but it’s true that Lennar was a major partner of Modsy’s. In May 2021, the companies announced a collaboration to create “walkable” 3D tours of model homes using Modsy’s technology . And Lennar’s corporate venture arm, Len X, on its website identifies Modsy as one of its portfolio companies.

“Together with Modsy, we are helping Lennar customers imagine their future homes,” reads a post on the Len X blog. “With Modsy’s life-like designs, customers can visualize what their future floorplan will look like before it’s built, work with a designer to customize the interior design to their needs and style, and purchase furniture and decor for their new home with ease.”

Upset customers

While the shell of the former Modsy team figures out a path forward, several customers say that they’ve been stonewalled by Modsy’s support team — or what remains of it. Five of the seven customers TechCrunch spoke with, all of whom applied for refunds in June, either hadn’t heard from the company or received boilerplate emails without information about the status of their refunds. One said that they were told they’d see a refund within three to five business days. Another was informed they’d been approved for a refund, but weren’t told when to expect it.

“I had $50,000 of in-process orders that are in limbo,” one customer told TechCrunch on Twitter. “[Modsy has] communicated that they will be fulfilling remaining outstanding orders for furniture, but actual logistics on this point have been sparse.”

Said another customer:  “[Modsy’s] service was supposed to facilitate returns — that was one of the perks. But that’s not happening. We have $4,500 in undelivered or unanswered return request, not counting the missing design services.”

Modsy’s initial business model revolved around selling interior design services on top of an AI-powered platform. Prior to founding the company, Tellerman was a partner at GV (formerly Google Ventures) focusing on retail, 3D, and augmented reality technologies.

Using Modsy’s apps, property owners could create renderings of their rooms and restyle them in real time, or pay a designer for a custom layout. Fixtures could be purchased either through Modsy directly or through partner tools like Crate & Barrel’s 3D Room Designer.

Backers in Modsy included TCV, Comcast Ventures, Norwest Venture Partners, and NBCUniversal. The company’s last funding round closed in May 2019, bringing Modsy’s total raised to $72.7 million, according to Crunchbase data.

In May, Modsy signaled that it would pivot to offer a software-as-a-service platform, Modsy Pro, as a service for interior designers. On the company’s website, Modsy Pro is described as “online interior design software that will transform the way you do business … bring your client’s space to life with our proprietary room-scan technology, 3D renders, and easily editable and shoppable designs.”

The move came two years after Modsy made a series of aggressive cuts, slashing designer pay and reducing both salaried employees and its network of designers. At the time, Tellerman told Business of Home that it was a part of an effort to make the company “leaner.” Business of Home’s reporting also revealed that Modsy, in addition to piloting its own furniture line, at one point experimented with outsourcing design work to the Philippines and Bulgaria as a way to reduce operating expenses.

The Modsy Pro landing page offers a way for users to apply for early access for the still-beta product. But in light of Modsy’s shutdown, the launch appears to be up in the air.





Source link

Tags: awaitingCustomersModsyquietlyrefundsShutTechCrunch
Share30Tweet19
Updates Finance

Updates Finance

Recommended For You

Atomos tows a $16M load of funding to create tugboats in space • TechCrunch

by Updates Finance
January 27, 2023
0

You may not have known that space needs tugboats, but now you do — and Atomos Space just closed a $16.2 million Series A investment, which will enable...

Read more

Traits of an Entrepreneur | StartupNation

by Updates Finance
January 27, 2023
0

Anne MacRae has been in the factoring, trade financing and asset based lending industry since 2006 and​ is currently the Vice President of Business Development with Express Business...

Read more

Google Forms cheat sheet: How to get started

by Updates Finance
January 27, 2023
0

Need to make a quiz, survey, registration form, order form, or other web page that gathers feedback from co-workers, customers, or others? You can design and deploy one...

Read more

Berlin-based design platform Kittl raises $11.6M Series A to take on Adobe and Canva • TechCrunch

by Updates Finance
January 26, 2023
0

To get a roundup of TechCrunch’s biggest and most important stories delivered to your inbox every day at 3 p.m. PST, subscribe here. Did you know you can...

Read more

Morgan Stanley fines some employees $1M for WhatsApp, iMessage use

by Updates Finance
January 26, 2023
0

Investment banking firm Morgan Stanley has punished some of its employees with fines that topped more than $1 million for breaching compliance rules by using WhatsApp and iMessage...

Read more
Next Post

Morgan Stanley expresses increased optimism on GM and Ford ahead of earnings (NYSE:GM)

Related News

Elon Musk Says His A.I. Robot Will Pave The Way to ‘A Future of Abundance’

October 5, 2022

Set Your Mark in the Gaming Industry With NFT Gaming Platform Development | by Allan Jackob | The Capital | Oct, 2022

October 6, 2022

Ukraine’s first Black Sea food shipment sails through sea of troubles

August 12, 2022

Browse by Category

  • Business
  • Cryptocurrency
  • Economy
  • Insurance
  • Investing
  • Latest updates
  • Market Research
  • Markets
  • Personal Finance
  • Retirement
  • Startups
  • Technology

Get the latest Financial news on updatesfinance.com. Business news, Economy news, Investing news, Personal Finance and more.

CATEGORIES

  • Business
  • Cryptocurrency
  • Economy
  • Insurance
  • Investing
  • Latest updates
  • Market Research
  • Markets
  • Personal Finance
  • Retirement
  • Startups
  • Technology

Recent News

  • Video shows Memphis police beating of Tyre Nichols
  • Nestle to invest $100 million in Colombia, says Colombia president By Reuters

Copyright © 2022 - Updates Finance..

No Result
View All Result
  • Home
  • DMCA
  • Disclaimer
  • Cookie Privacy Policy
  • Privacy Policy
  • Terms and Conditions
  • Contact us

Copyright © 2022 - Updates Finance..

Are you sure want to unlock this post?
Unlock left : 0
Are you sure want to cancel subscription?