Veoh Finally Calls It Quits: Layoffs Yesterday, Bankruptcy Filing Soon
Veoh, one of several well-funded start-ups that have tried and failed to cash in on the Web video boom, is finally calling it quits. The company let go of the remainder of its workforce yesterday, and sources say it plans on filing for Chapter 7 bankruptcy protection in the near future.
Veoh, which started as YouTube-style site, has struggled for years to find a business model that works and has burned through $70 million in funding from name-brand investors like Goldman Sachs (GS), Time Warner (TWX), Intel’s (INTC) venture arm, Spark Capital and former Disney (DIS) CEO Michael Eisner.
CEO Dmitry Shapiro declined to comment. He is tweeting, though:
This one has been a long time coming. Last year, the San Diego-based company laid off about a third of its staff, replaced its CEO with founder Shapiro and focused on developing a Web browser-based app. Shapiro has also been actively looking for a buyer, but a copyright lawsuit with Universal Music Group made the site a difficult sale.
The company was buoyed last fall when it effectively won that lawsuit: In a sweeping ruling, a federal judge ruled that Veoh was protected against the music label’s copyright claims by the Digital Millennium Copyright Act.
That decision gave Veoh executives the confidence to try to gather up yet another funding round. And as recently as January, the company thought it might be able to convince its existing investors to pony up yet again.
But that plan collapsed in the past few weeks, sources said. It’s striking that Veoh couldn’t find any buyer willing to pay up for either its technology or its audience, which was supposedly at 25 million uniques last spring.
Here’s a post-mortem from Spark’s Todd Dagres, a Veoh board member: