Fundraising Trouble At Kids Clothing Startup Wittlebee Leads Sean Percival To Give Up CEO Role

Co-founder Sean Percival is walking away from his CEO position at the children’s subscription clothing startup Wittlebee after it had trouble raising a Series A. Amidst a tough fundraising climate for e-commerce startups, Sean says he thinks Wittlebee will continue operating but it’s up to the board of directors. No replacement has been selected yet for the renowned content ninja and former Myspace VP.

Percival originally broke into the startup world after starting a website in 2006 and then selling it for $100,000 in 2009. In the meantime he worked at Docstoc and Mahalo before becoming the VP of online marketing at Myspace. He left in July 2011 to get into subscription commerce.

Wittlebee launched out of Los Angeles’ Science incubator in January 2012. It was designed to get parents great deals on kids clothing by sending them monthly packages with eight items. At the time Percival said the main draw of the subscription service was that it packs about $80 worth of clothing in a $40 box. He told us “With Wittlebee we save parents time, money and reduce those ‘mall meltdown’ moments.”

Wittlebee Screenshot

Wittlebee raised a $2.5 million seed round from Google VenturesMatt CoffinCrosslink Capital, and Rincon Venture Partners. Sometimes referred to as the “Birchbox for babies,” Wittlebee made its first acquisition of Cottonseed Clothing. Last we had heard, Percival and his co-founder Gabe Harriman were trying to raise a Series A.

That apparently wasn’t so easy even though Wittlebee’s revenue was growing. Percival tells me “While the company has done fairly well, the market conditions for e-commerce funding are not great. So the last few months have been a challenge for both the business and myself. We have been working hard on finding the best go forward plan but time has run out, at least for my involvement.”

As for a new CEO, Percival says, “This is still being worked out so nothing to announce at this time.” I asked if Wittlebee would keep operating and outfitting kids, to which he answered, “I believe so and this is to be determined by the BOD. The company was continuing to show revenue growth this year despite the challenges of being undercapitalized.”

Percival started the company just as he became a father. Now a little older and wiser, he’s looking to the future. What’s his next adventure? “At this time I’m not certain. I’m talking through a few opportunities and might even do something crazy, like start another business.”

The issue for Wittlebee seems to be that, while seed funding has become easier to find, the flood of startups that it permits is indeed causing a Series A crunch. While engineer-heavy software startups may be able to find a soft landing through an acquisition, e-commerce startups like Wittlebee may have a tougher time. Regardless of what happens, in the age of startup success theater, it’s nice to see a founder be so frank about his company’s challenges. Not everyone has to be “killing it” all the time.