Hopes for Skully Helmets, whose augmented reality motorcycle headgear attracted 3,000 pre-orders, may have crashed.
Differences between the San Francisco startup’s founding brothers, who were ousted earlier this month, and its investors came to an impasse over the weekend, a source with knowledge of the situation told me.
As a result, its 50 full-time employees were reportedly terminated Monday without any severance, vendors may not get paid and the specter was raised that thousands of people who put money down on pre-orders and through crowdfunding may get nothing.
Statements issued by the company and one of its investors do little to resolve those questions.
“We’re disappointed Skully has closed its doors,” Intel Capital said in a statement provided to the Business Journal. “We’ve been focused on the company’s success for nearly two years and have recently been trying to negotiate a funding round to keep it going. We’re certainly sorry for the employees who are losing their jobs, the crowdfunding backers whose investments didn’t work out and the customers who’d pre-purchased product. We continue to be excited by the promise of this kind of wearable technology.”
Carlos Rodriguez, vice president of sales and marketing at Skully, however, issued a statement that said the company is “just shifting gears” and remains committed to fulfill its orders.
“When you set out to disrupt markets, you have to find new ways to do things,” the company statement said. “Skully is experiencing some growing pains and a change-of-control transition at the same time. you can imagine, this is tough to do. And, this can lead to rumors and speculation. We are working through the complexities of an emerging-growth startup reality to deliver the most advanced, useful, augmented helmet the world has ever seen to our customers. We thank our early adopters for sticking with us, Skully’s management is committed to fulfil all our AR-1 delivery obligations to our customers.”
Rodriguez said a formal statement will come after “ senior management and our board wraps up final negotiations in the next 72 hours.”
Venture investors, led by Intel Capital and Walden Riverwood Ventures, had poured about $12.5 million into the company since it was launched at a Demo conference in 2013. Skully was featured in The Pitch shortly after being declared a “Demo God” at that conference.
Another $2.5 million was invested in a successful Indiegogo campaign in 2014.
Weller told the Business Journal earlier this year that he expected deliveries of Skully’s helmets, which give riders a heads-up rear view of the road and other information, to be in full swing by now.
But the company apparently had trouble fulfilling its orders, leading founders Marcus and Mitch Weller to try to sell the business to China-based LeSports, a subsidiary of LeEco. That reportedly led to their ouster when the Wellers and investors couldn’t agree on the sale.
Further friction between the Wellers and their investors over attempts to raise new funds resulted in the decision to shut down, my source told me. The brothers reportedly tried to revive those talks after learning of the shutdown but as of Wednesday morning it appeared investors appear were ready to move on.
Then Skully issued its statement, leaving the company’s future in question. It looks like all the inventory from their site is currently out of stock and it also appears that if you put in a pre-order you may not get a helmet or even your money back.
