Four year old online payment startup Bitpass is calling is quits, via a mass email to customers. The message, which comes from Mathew Graves and is reprinted below, gives no reason for the shutdown although we can presume it is due to cash flow, or lack thereof.
Bitpass raised over $13 million in two rounds of financing, with the bulk of that raised in late 2004. But their business model of facilitating small purchases via stored value had few takers and transaction volume never ramped to sustainable levels. A recent major upgrade to their platform obviously didn’t do the trick. We’ll update with any additional information from the company. Bitpass is now in the TechCrunch DeadPool.
From: Bitpass Inc. [mailto:Support@bitpass.com]
Sent: Friday, January 19, 2007 5:52 PM
Subject: Bitpass is Discontinuing Service
Dear Valued Bitpass Buyer,
We want to thank you for your past business, however due to circumstances beyond our control, we are discontinuing our operations.
We have partnered with Digital River to provide operational support during the period prior to shut down. As of today, January 19, 2007, all Bitpass Buyers with US dollar denominated accounts are being notified that they will have seven (7) days to spend any amounts that currently exist in their Bitpass Account.
During this seven day period, US Buyers will not be able to further fund their account.
On January 26, all US Bitpass Buyer accounts will be closed and Digital River will begin the process of refunding all unspent monies to the accountholder.
All account records and materials will be retained for 60 days and available upon request.
Again we would like to thank you for your business and support.
Chief Operating Officer