Quirky, the long-suffering startup that was once held up as a model for bridging the maker movement and corporate world, has filed for bankruptcy.
The New York-based company has had plenty of issues lately, and we’d heard that Wink had been for sale for quite some time prior to the company filing for bankruptcy. CEO Ben Kaufman said the company had run out of money at Fortune Brainstorm Tech earlier this year.
As part of the voluntary Chapter 11 filing the company announced today, Flextronics International has put a $15 million stalking horse bid for Wink, which sets the minimum price for its acquisition.
Statements from both Quirky and Wink stress that the the bankruptcy will not impact Wink’s customers or its relationship with The Home Depot and Amazon.
While the show will go on at Wink, the bankruptcy is a hard knock for three groups.
First, the bankruptcy underlines potential problems with the broader Internet of Things. One of the biggest risks critics cite is hardware losing support and becoming vulnerable or non-functional if a company goes out of business. It’s as much an issue of the actual hardware as it is a perception issue for existing and future IoT companies.
The Quirky bankruptcy is also a hit for the maker movement that was looking to the ideas marketplace as a potential way to monetize the hacks, gizmos, and gadgets that are proliferating as hardware becomes cheaper.
Finally, Quirky’s fall from grace is a knock for investors who’d touted the company and invested significant dollars into it. Quirky had raised over $185 million in venture funding from leading venture firms in Silicon Valley and New York like Kleiner Perkins Caufield & Byers, Norwest Venture Partners, General Electric and RRE Ventures; and was considered to be one of the luminaries of the burgeoning New York City startup scene.
And though Wink has found a bidder, Quirky, is still working with potential companies to find a buyer for its own remaining assets like the brand and the company’s community.
The Company has engaged Cooley LLP and Klestadt Winters Jureller Southard & Stevens, LLP as counsel, FTI Consulting as its restructuring advisors, Centerview Partners LLC as investment banker with respect to the Wink assets, and Hilco Streambank as investment banker with respect to the Quirky assets.