Venture capital investments in start-ups continue to rise, and so does the number of companies that are being weeded out. We have covered a few that have closed their doors or retrenched.
Add San Mateo, California-based micro-payment service BitPass to that list today. We just got an email from their Chief Operating Officer Matthew Graves with the subject line: Bitpass is Discontinuing Service. The company had been around for a while, and had raised over $15 million in venture money, bought a few start-ups and partnered with the likes of MSN. (Full text of the email after the jump.)
Update: Many have been wondering if their corporate business is still going to be around. We checked with their spokesperson and got this response: “Unfortunately, at this point Bitpass has decided to close its doors, sad as they were doing exciting things.”
We want to thank you for your past business, however due to circumstances beyond our control, we are discontinuing our operations.
We have partnered with Digital River to provide operational support during the period prior to shut down. As of today, January 19, 2007, all Bitpass Buyers with US dollar denominated accounts are being notified that they will have seven (7) days to spend any amounts that currently exist in their Bitpass Account.
During this seven day period, US Buyers will not be able to further fund their account.
On January 26, all US Bitpass Buyer accounts will be closed and Digital River will begin the process of refunding all unspent monies to the accountholder.
All account records and materials will be retained for 60 days and available upon request.
… and I just monetized a significant part of our content using BitPass. It was nice while it lasted… only a few days. Actually, I thought these guys were great I had been using them on various projects for awhile. I just added another two days ago.
The service was incredibly easy to set up and rev share seemed quite fair – which, of course, may have been the problem – not greedy enough!
WANTED: New content monetization service. Please leave suggestions here!
You are too quick, Om. I was about to send a tip.
Sad to see them go. Unfortunately the odds are stacked against many of the Web 2.0 startups. It’s odd that more established companies like eBay, Google, Yahoo and Microsoft don’t see these startups as kind of a Minor League (pardon the baseball analogy) that they can develop.
Why would they not affiliate themselves with startups that fit their business model or could potentially open doors to new business rather than develop everything themselves. They can provide management and technical support and when the startup is ready they can call them up to the Majors (M&A) at a much-reduced price over the hotshot independent startups (YouTube) that did it on their own.
Just as minor league baseball players want a shot and are willing to work for less as they develop so these Web 2.0 companies would be willing to give away a little of the upside for the shot to make it to the bigs. VC’s could hedge their bets and they certainly have the contacts to facilitate these arrangements.
I was in the same position as Bitpass with my company had I aligned myself with a fish that was bigger I would still be growing my business. The key is to make these deals at the early stage rather than when it is necessary to survive.
BitPass has been a long time competitor of ours. In the early years, they generated a ton of buzz around the “micropayments” payment sector. I was a bit reluctant to sell our entire business model to that strategy since the payment industry itself had so many barriers to creating a true micropayment solution at the time. The pre-funding account requirement was their fatal flaw.
I felt they should have taken a basic content delivery strategy from the get go and evolve into micropayments as the issues with the fees were addressed. PayPal actually even has a micropayment account now that may have helped their cause.
I wish their team the best of luck,
Shannon
PayLoadz.com
I got the BitPass email and immediately checked my account. I was surprised to see that it had been emptied. I discovered that BitPass began charging monthly $5 maintenance fees in December. While this new fee structure was listed on their website, it was not emailed to customers. (I even checked my spam folder.)
I consider that fraudulent and, because of it, am glad that they’re out of business.
Alton,
I invite you to come try Payso.com we’ve been in business since 2002, slightly longer than Bitpass.
At Payso.com we’ve focused on providing trusted reliable processing. We have never taken Venture Capital funding as that would compromise our financial stability which is important to maintaining long term reliable online payment services.
We only charge a 15% per transaction fee. There is no setup fee to use Payso and no monthly fees. You can sell your content for as low as 1 cent and up to $100. We mail checks every 7 to 10 business days. There are no fees for checks requested over $200. With our service both US Dollar and Canadian Dollar can be used.
Payso is easy to integrate with your site and we have scripts available for use on your site so that there is little or no programming for you.
At Payso we are very flexible to our merchants’ needs and often provide custom solutions if you have a unique need.
We are already starting to see former Bitpass merchants signing up for Payso and I welcome you to become one of them.
For more information visit our website at http://www.payso.com
Kind Regards,
Peter
Peter, nothing personal, but your website needs major updating. The design is really 1995.
Best,
Artashes
In that case, check out ClickandBuy
http://www.clickandbuy.com
they’re not minor league anymore, offer all the features you’re looking for — and more
It is always sad to see a company disappear in this way, and even worse for their customers to be left hanging (let alone be charged unknown fees as described above).
Our company is trying to avoid the pitfalls often seen with Web 2.0 Companies.
We work directly in the space of helping companies of all sizes (from self-published to large digital content providers) monetize their content.
We focus on tagging the content.
When a customer wants to access the tagged content he has to obtain a valid certificate. To do this usually requires a payment (we utilize the advantages of PayPal Micro-Transactions for payment).
Once payment is made – the user is granted access to the tagged content – usually for a time limited period.
For the Publisher this offers:
- Security
- No Account/Subscription Management
- Ease of use (both setup and admin)
- Less risk (they are using an existing highly successful method of receiving payment)
For the customer this offers:
- No complex account setup
- No wallets or pre-funded accounts, coins or whatever
- A simple transaction leading to time-limited access to the content
- Security
We hope that our technology protects the Publisher from future failures of Web2.0 Companies.
For more information please come to our website:
http://www.encryptanet.com
Robert
If somebody is really interested in online micropayments and wants to get the most out of it please visit:
OneBip is a mobile phone based payment solution to handle online transactions. With OneBip customers get debited on their phone bill or pre-paid card with no need for a credit card or a bank account.
OneBip perfect to handle online micro-payments and is complementary to other billing solution, attracting customers that don’t have or don’t want to use their credit card to pay online.
OneBip is secure and easy to integrate. Using the online registration, merchants can go live and start accepting mobile phone payments in less than 5 minutes with no fixed costs.
Diego