The idea behind Leverage was simple and had some potential: it offered an advanced management system for gift cards, hugely popular worldwide especially this time of year, so you could register all of them and keep track of how much you have left or stored on each one. You were also able to buy gift cards, or swap them with others. The service also let you manage all of your loyalty reward programs, such as frequent-flyer or frequent-stay plans.
Leverage, which was founded in May 2005 and had raised $2 million in angel funding, planned to generate revenue by reselling gift cards (see our launch coverage for more). It turns out the business model wasn’t solid enough to keep the company afloat during tough times. It appears the entire staff has been laid off (right before the holidays, which is supposed to be a key period for this type of company) last week.
From the blog post by former web developer Colleen Robledo:
With VC funding freezing up and retail revenues down, the company can’t afford to keep any of us on payroll. The owners are hoping this is just a temporary lay-off, that they will get funded again after the holidays, and be able to hire us all back.
We’re putting Leverage in the deadpool, because that last part was just wishful thinking.
Update: We’ve confirmed that Leverage has laid off all of its employees (15 people), but it is still looking for options to salvage its business, including an attempt to raise more money. We received the statement below from the company, in which it tries to spin the layoffs as a “temporary measure.” The company remains in the deadpool for now.
Leverage, Inc., confirms a staff layoff earlier this week. This painful but temporary measure was taken to help the company focus operations in a very difficult economy. With an increasing number of high-profile retail and manufacturing bankruptcies, companies big and small are being urged by the investment community to make difficult cost cuts.
This layoff was regrettable, but necessary, to ensure our ability to continue to provide the high level of service and support that our customers and partners have come to expect. We have extended everyone affected by the layoff an offer to work with us on a contract basis as needed since the holidays are a very busy time for the company. While the layoff does have an effect on the pace of our overall development, the site is alive and healthy, it has more features than ever, and new features will continue to roll out over the next weeks and months.
Leverage’s online gift card, loyalty, and promotional services continue to deliver industry-leading value, convenience and protection for consumers, and provide a unique marketing opportunity that maximizes ROI for our merchant partners. In addition, investors continue to view Leverage and its unique business model as strong and viable. We expect to receive our next round of funding in Q1 2009, at which time we anticipate an even more rapid expansion of our operations.