In a rather sad end to 2007, the venture firm behind mobile media startup 3Guppies, VantagePoint, has closed down the company. This is despite still having $8 million of an original $20 million (raised in April 2006) left to burn in the bank. VentureBeat reports that the company’s 40 employees were sent home last week, but will be paid through the end of the month.
3 Guppies was started after VantagePoint spent $20 million acquiring two companies: MoPhone, a mobile social networking company, and 3Guploads, a mobile content company (ringtones). However, the mobile ringtone market has been drying up over the last year as margins tighten and mobile phones become more open. One of the largest ringtone distributors sold to Bellrock Media last year under competitive pressure.
The two companies struggled to find a way forward under the leadership of MoPhone’s former CEO Bill Bryant. The combined company’s new offering was a simple addition of the two original startups. 3Guppies allowed users to share and store pictures in a free mobile locker as well as create your own MP3 ringtones and download video to any cell phone. The offering is similar to those of Juicecaster and Treemo. However, evolving the company beyond this combined service proved too difficult. Within a year Bryant was removed from his position, taking along money made from the original merger. Bryant said, “We couldn’t build other services on top of the technology, so we were stuck in the ringtone business.”
VantagePoint then realized the combination wouldn’t pay off to be the big hit they were looking for and pulled the plug on the operation. Seattle PI is reporting that VantagePoint is instead negotiating to sell its majority interest back to the management team. For now we’re putting it in the deadpool.
Update: The shut down has been confirmed. VantagePoint said, “it just was not a good idea to blast to the end of the runway and crash, but to taxi off gracefully.”