UPDATE: Color is not shutting down according to a statement by Color Labs and Sequoia Capital spokesperson provided to TechCrunch.
According to VentureBeat, Color, the startup with more unsustainable hype than the the world has possibly ever seen, is preparing to go dark. Shareholders and the board have voted to close the company’s doors for good.
Color has had a spotty history, and was a disappointment after raising $40 million last year from Sequoia Capital and Bain Capital, enjoying what was obviously now a serious overvaluation. Many saw Color’s inevitable demise, despite having received more money from Sequoia Capital than the early-stage venture capital allotted even Google.
At launch, the app jumped on the photo-sharing bandwagon while also introducing us to the idea of the elastic, location-aware social network. Users could share photos with others in their current location, giving them a real-time photo album of strangers near and around them. But even without location features, Instagram was still dominating the photo-sharing space, and we all know how that’s gone (hint: very, very well). Color’s intial idea floundered, and its founders went back to the drawing board.
Its pivot then transformed the photo-sharing app into a live video broadcasting service integrated with Facebook (and then Verizon). The concept had some potential thanks to the “Instagram for video” trend, and according to AppData was used by 460,000 users per month, but Color Labs’ investors and shareholders purportedly have finally come to the conclusion that it’s not enough.
Venturebeat got a hold of an email that was sent out to its employees that indicates the bleak future for the startup:
“I hope is all well with you. As you may or may not have heard, Color is going through a number of changes. Last week, the board and major shareholders voted to wind down the company.
We ask that you politely cancel any existing commitments stating we are closing our [redacted] program.”
The internal turmoil within Color Labs has been well-documented, and it should come to no one’s surprise that the startup has been on shaky ground for awhile. Color Labs was burning quickly through the $40 million to sustain its first app but had no significant user traction to show for the investment. To the tech world, Color has been the quintessential disappointment.
Color’s co-founder Bill Nguyen was rumored to have retreated from his role as CEO and in his stead, investor and Color Labs board member Geoff Raiston took over the reins. Boardmembers were torn between letting a new CEO officially replace Nguyen, while others have been loyal to its current CEO. Nguyen confirmed with TechCrunch that he had ceased his day-to-day activities with Color, but assured them that everything was in order back at Color Labs headquarters and that he was simply taking a breather. Of course if these most recent reports are valid, his words were simply meant to brush off the uncertain state of the company.
We’ve reached out to Color Labs and will update this space with any new developments.