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For venture capital-funded start ups rallying to support and be part of the mobile e-commerce revolution, business is not always plain sailing, despite the mobile-led, new media-orientated future of all online businesses.
Clinkle, a mobile payments start up which received $25 million in funding in the summer of 2013 under the steerage of at the time 21 year old CEO Lucas Duplan, has once again fallen foul of controversy, as employees have begun walking out of the firm in protest at Mr. Duplan’s commercial conduct.
Mr. Duplan, still in his early 20s, founded Clinkle and made news headlines by securing the largest round of seed funding in Silicon Valley history by obtaining $25 million from a long list of Silicon Valley investors which included Andreessen Horowitz, Peter Thiel, Accel Partners’ Jim Breyer, Intel, Intuit, former Facebook COO Owen Van Natta, Salesforce CEO Marc Benioff, the founders of Qualcomm and VMware, and many others.
Only now is the real revolution beginning to take place, in which online firms, including FX companies, are embracing mobile-led solutions, and are using mobile platforms to perform deposits and withdrawals integrally, as exemplified by OANDA’s upgrade of its fxTrade mobile trading platform last week to include the ability to process withdrawals and deposits via mobile devices.
Such necessity to engage customers via mobile devices has driven a vast technological development rush toward video streaming for mobile devices, the use of new media to engage customers, full functional trading platforms and, of course, the ability to deposit funds via mobile devices which is where payment firms such as Clinkle which specialize in this area are interesting to many e-commerce and online trading firms.
Rather than rushing toward the realms of the large, highly successful electronic payment providers, Clinkle has been plagued with commercial difficulty from its outset, despite its entry into a burgeoning sector. Just 6 months after the seed funding was granted, the firm layed off over 30 employees in December 2013, with a further number having resigned of their own accord as a result of ambiguity over employee options packages.
Yesterday, a further seven employees left the firm, allegedly due to frustration with Mr. Duplan’s leadership, according to multiple sources close to the company. TechCrunch reported that Mr. Duplan is said to have withheld information from employees about acquisition talks with Apple Inc. (NASDAQ:AAPL) that the team hoped would result in a sale. He is believed to have quietly dug for more buyout offers in hopes of improving his financial status because he holds an outsized amount of equity in the startup.
As suspicions of a hidden Apple offer swirled, Mr. Duplan fired the company’s CFO and VP of engineering, which is said to have been the last straw for quite a few employees, according to the report by TechCrunch. Mr. Duplan has tasked the remaining team with stopping development of Clinkle’s debit card product to pivot the company into a business to business API for payment rewards.
Clinkle was previously subject to much skepticism due to its securing of funding without a marketable product having been ready. Mr Duplan said: “With respect to mergers and acquisitions, I can’t confirm or deny that any conversations have taken place or are taking place. Secondly, today we indeed did have a planned staff restructuring, and that’s actually part of a greater reorganization and cost abatement plan which we’ve been looking at doing for a while now.”
“The level of consumer engagement around the card specifically has not gained the traction quickly enough for us to continue pusuing it. That being said, the Treats concept shows terrific promise, and so what we’re focusing on right now is what’s the best way to actually commercialize that” concluded Mr. Duplan.
While Mr. Duplan wouldn’t comment on the acquisition talks, he confirms Clinkle is pivoting away from debit cards. However, a source firmly disputes the CEO’s characterization of the employees leaving today. They said the core employees quit because they felt misled by Duplan, and the company did not plan their departures. The remaining team is believed to be less than a dozen, down from 70 several years ago.
Photographs: Top Right – Clinkle founder & CEO Lucas Duplan. Lower left – Social media message by former employee. Source: TechCrunch.