First Flooz, now Beenz.
One week after chief competitor Flooz went into snooze mode, alternative Web currency firm Beenz announced its online operations would shut down on August 26.
"No beenz earning or spending transactions will be honored after that date and time. Any beenz remaining in a Member's account after 12:01 am (EST) on August 26, 2001 will be invalidated by beenz.com, and the Member will not be entitled to any compensation of any kind for such invalidated beenz," according to a note posted on the company's home page.
Beenz, which has dual headquarters in New York and London, was launched in March 1999 with elaborate plans to create an online, incentive-based currency for e-commerce merchants.
Investors pumped a whopping $80 million in four separate funding rounds but, the concept never took off and the initial optimism has given way to large-scale contraction.
The demise of alternative currency plays like Beenz and Flooz comes as the big credit card companies like Visa and American Express continue to tinker with their security platforms to offer payment methods to online shoppers.
Beenz principals could not be reached for comment for a source close to the company said the majority of its workforce would be laid off and a skeleton crew retained to help sell the technology.
atNewYork has learned that about a dozen employees will remain in New York but the London office would be shut down. Beenz is pressing ahead with plans to sell its proprietary technology in parts and an announcement could be made "maybe within two weeks," according to a source.
There were several hints in recent months that Beenz wouldn't stay the course.
In May, two of the company's top executives - CEO Charles Cohen and president Don Maguire quit their posts and joint venture operations in Japan, China, Korea and Italy were shuttered.
At that time, a company official told atNewYork: "We won't be pursuing another round of financing. It is clear that the market has deteriorated to the point where we have to sell now to get some value for our shareholders."
At the height of its operations in 2000, Beenz employed 265 in offices worldwide.
Investors left holding the bag include Kataweb, the online property of Italian media giant Gruppo l'Espresso; New World CyberBase Ltd., the technology flagship of Hong Kong-based New World Group; and Central Banking Corporation, a leading Korean merchant bank.
Venture firms BayStar Capital and Sycamore Ventures have also invested heavily in Beenz, along with ING Barings and DRW Venture Partners, an affiliate of Dain Rauscher Wessels, Apax Partners Funds, Patricof & Co. Ventures, Hikari Tsushin Partners II, L.P., Viventures Partners S.A., the French investor Artimis and Gefinor (USA) Inc.
Reprinted from www.atnewyork.com.
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