Mobile Publishing Startup Onswipe to Close, Avoids Bankruptcy by Selling Itself
From the Not a Surprise Dep’t:
Fortune is reporting this morning (5 August 2014) that Onswipe has been sold off:
Onswipe, a New York-based ad-tech startup, has sold itself to Beanstock Media, a Silicon Valley-based adtech company, Fortune has learned. An announcement could come as soon as tomorrow.
A private message from Onswipe CEO Jonty Kelt, obtained by Fortune, called the deal a “soft landing,” which is startup parlance for failure.
Update (12 August 2014): The deal was officially announced today. The following story is mostly correct, with one exception: at least one existing investor, Spark Capital, will be getting equity in Beanstock as part of the deal.
Not to be mean, but this is one of those times that I wonder why a company stuck with an unworkable idea for so long.
Initially launched in 2011, Onswipe set an ambitious goal: "to power the way the world experiences the web on tablets". This startup developed a unique publishing platform which enabled websites to take their existing content, automatically generate an app-like layout for mobile devices, and monetize it by adding adverts. At first the platform was only designed to support the iPad, but it was later expanded with support for a couple Android tablets, including the Nexus 7 and Kindle Fire, the iPhone, and (in late 2013) Android smartphones.
As you can see in the screenshot above, this looks like a cool idea, but unfortunately the nifty-ness of the tech didn’t translate into market success. Hardly any publisher wanted to use Onswipe; last fall Onswipe boasted that 27 million website visitors were viewing an Onswipe supported site each month. Compared to the 500 million plus iDevices then in use, that is a relatively small number.
Frankly, I’m not surprised by the limited adoption or by today’s news. As I pointed out last fall, Onswipe was promoting a solution which was – at best- clunky when it launched. By the time it was working well enough to offer consistent performance, it had been made redundant by advances in website design.
Thanks to a concept called responsive web design, Onswipe’s proprietary platform was redundant. If you take a moment from reading this post and adjust your browser window so it is narrow and tall, you’ll see that a well-designed website (or even an adequately designed site such as this one) supports all screen sizes from smartphone to desktop. That effectively killed any need for Onswipe.
Onswipe is reportedly selling for just enough to retire its $2.5 million in debts and pay off a $2 million convertible bridge note raised this spring. The latter was provided six months ago “to keep the company alive in order to find a soft landing,” Onswipe CEO Jonty Kelt wrote in an email obtained by Fortune.
The company had raised around $12 million in funding.
According to Kelt’s email, Beanstock Media is acquiring Onswipe because it does not have a mobile strategy, and because it wanted more direct sales and a New York presence. This firm bills itself as a publisher trading desk company for ad placements. It had reportedly brought in $40 million in revenue in 2013, far more than the roughly $500,000 in monthly revenue Onswipe was reportedly generating.
It will absorb 24 of Onswipe’s 28 employees.
Irrexu August 12, 2014 um 4:41 pm
$500,000 in monthly revenues? With 28 employees that should have kept them profitable. Or was that in annual revenue?
Nate Hoffelder August 12, 2014 um 4:59 pm
Fortune said monthly. I suspect it was gross, not net, in which case Onswipe’s cut was about half.