CHICAGO (Reuters) – Invention start-up company Quirky Inc, backed by a string of venture capital funds, has filed for Chapter 11 relief & put its smart home platform Wink up for sale, court filings showed on Tuesday.
New York City-based Quirky, which refers to itself as a "revolutionary online idea factory & marketplace," said the bankruptcy was triggered by its failure to effectively manage & finance costs linked to the roll-out of unusual gadgets such as the "egg minder," which notified smartphones when eggs were going bad.
Other start-ups have moreover collapsed this year, such as Homejoy which used the web to offer house cleaning, raising concerns among venture capitalists approximately investing in companies that cater to consumers rather than businesses.
Quirky raised $175 million in equity from investors including RRE Ventures, Northwest Venture Partners, Andreessen Horowitz & affiliates of General Electric & Kleiner Perkins Caufield Byers. Most recently, it raised $79 million in late 2013.
Flextronics International, a Wink partner & moreover its biggest creditor, has committed to pay at least $15 million for the platform, which moreover has partnerships with General Electric & Honeywell International. The sale is subject to a better offer.
Quirky, which laid off 159 staff this summer & has 90 employees remaining, is moreover looking for buyers for its other assets. It has hired Cooley LLP & Klestadt Winters Jureller Southard & Stevens LLP as its attorneys & FTI Consulting as its restructuring advisors.
The bankruptcy is In re Quirky, Inc. U.S. Bankruptcy Court, Southern District of New York, No. 15-12596.
(Reporting by Tracy Rucinski; Editing by Alan Crosby)