The New Wins Auction For The Old’s Assets

Mobile messaging startup announced a couple of weeks ago that its assets were being auctioned off. Now it looks like the auction is over. The winner?

Well, technically it’s “ 2014 Inc.,” but founder Keith Teare (who also co-founded TechCrunch) said the new company’s goal is to continue the same work: “And from a user point of view, we hope not to skip a beat.”

As I wrote in my initial coverage, Teare said the auction was necessary because of the $1.5 million in debt that took on from Hercules Technology Growth Capital. Combined with decent-but-not-spectacular growth numbers (Teare said it has hundreds of thousands of users), the debt meant the startup had trouble raising money, so it was selling off its assets to pay back the money it owed, or as much of that money as possible. Even then, Teare expressed his hope that he would be the top bidder — but it had to be a fair auction for him to meet his obligations to Hercules.

When Teare told me today about the results, he said he’s not allowed to disclose the exact price, but he did note that the sale was funded by and therefore “within the means” of his incubator Archimedes Labs — in other words, it probably wasn’t an enormous sum. He also said that there were 23 bids total, and that nine of those bids were for the full package of assets rather than individual pieces.

Teare added that’s focus has shifted since it launched earlier this year. Initially, the app combined taking pictures for your private memories, sending messages to friends, and expressing yourself in public. However, it’s the public expression that has seen the most usage (something Teare attributed in part to the quality of the native photo and messaging experiences on iOS and Android), and that’s where the company has been adding new features like the ability to leave “confessions,” which can be anonymous.

The app isn’t abandoning the other areas completely, but treating expression as the “starting point”: “Public expression leads to serendipitous meetings which leads to the desire to chat privately. We’re really trying to focus on that set of behaviors.”

And yes, Teare acknowledged that there’s no guarantee that the new company, which is fundraising on AngelList, will succeed.

“I would say there’s no slam dunk,” he said. “I didn’t want to acquire the assets because I think there’s a magic formula. I acquired the assets because I think the app is doing really well and there’s no reason for us to die at this point.”