Despite $120 Million in Venture Captial Funding, Medibuy Cuts Staff By 70 People
If you log onto Thegolfer.com, the animated cartoon says it all: a picture of green on the 18th hole with a golf ball plopping into a nearby pond.
In other words, the San Diego company that was started three years ago has gone under, closing its doors on Dec. 15.
CEO Eric Campbell said the 14-person company that hosts an online golf reservations service simply couldn’t attract the necessary financing to keep it afloat. The firm was seeking about $3 million from investors.
While the Internet reservations service gained some success in lining up about 1,100 golf courses and had some 105,000 members, the traffic wasn’t high enough to generate the kind of revenues needed to secure additional contracts with other sites that would have helped push it toward the break-even line.
“When we went national, the volume didn’t materialize and we weren’t able to get to profitability as quickly as we had hoped,” Campbell said.
Formerly called SelectTTimes, the company previously attracted about $8 million in angel financing and grew fairly quickly, signing agreements with first local courses and later, national networks.
Last March, the firm had more than doubled in signed golf courses and its staff numbered about 35.
“The people who used the service loved it, but we just didn’t have enough meat there,” said Mike Krenn, Thegolfer.com’s director of business development.
Campbell said because cash is so tight among his competitors, he was forced to liquidate assets in order to pay off creditors. He declined to say what the firm’s total assets were, but said revenues were running at about $50,000 a month.
Thegolfer.com’s demise has been a common story in recent months as investment funding for Internet firms, particularly business-to-consumer models, has all but dried up, according to many observers.
“Many of these companies got their funding at a time when investors thought any company with dot-com after its name would be successful, but very few of them have proved to be a viable business model,” said Peter Shaw, of Shaw Management Advisors, and former CEO of San Diego-based Sitematic Corp.
“The problem with B2C firms and dot-coms in general is they can’t generate the kind of activity required to make them profitable. The cost to get customers is very high and retaining them is very high. Everybody had this good idea , build it and they will come , but it turned out not to be true. The consumer activity is just not there to make it viable.”
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Medibuy Cuts 70 Employees: Medibuy.com, a local Internet firm that operates a Web site linking suppliers and buyers of medical equipment and supplies, laid off 70 people last month, including 40 in San Diego.
Medibuy has attracted more than $120 million in venture capital financing and filed an S-1 report about a year ago with the Securities and Exchange Commission for a $143 million IPO, but withdrew it in July.
Imaging Technologies On Spree: San Diego-based Imaging Technologies, a designer and developer of printers and imaging equipment, made back-to-back acquisition announcements Dec. 18 and 19. The first was for a majority ownership in Quality Photographic Imaging, a visual marketing support firm based in Buena Park.
The following day, Imaging Technologies said it signed a definitive agreement to purchase 75 percent of Pen Interconnect, Inc., based in Irvine. The company didn’t disclose any price for the acquisitions and calls to the firm were not returned.
Imaging Technologies was founded in 1982 and produces imaging products for diverse markets. Its stock is traded on the over-the-counter bulletin board and had a 52-week range of $3.21 to 0.03 and traded at about a dime as of Dec. 19.
Send any high-tech finance news to mallen@sdbj.com.
