More UK dot-coms log off
Adabra.com, which launched a group-buying service last autumn, has sold its business assets to another UK-based e-commerce startup in the latest aftershock of April's dot-com downturn. At the same time, health-care e-commerce startup Clickmango announced it would wind down its business after failing to secure a second round of financing.
Adabra launched UK operations last October amid a brief boom for high-tech startup investment. Cofounder Nigel Jones admits that his company's decision to close up shop is yet another indication that the boom is over, and the process of consolidation continues.
Like Clickmango, the company decided it was best to wind down operations while there was still the funding left to do so in an orderly way. "It has been difficult to get funding," Jones said. "Our board decided this was the best way to go for everyone, the board, the employees. The employees were our main concern."
He said Europe is probably big enough for only three group-buying companies: "The way we see it, in the European [group-buying] marketplace there will be three companies: Dealpartners Network, Letsbuyit.com and [US-based startup] mobshop.com."
Adabra, like mobshop, letsbuyit and Dealpartners, used the innovative group-buying business model, in which the price of an item goes down the more people sign up to purchase it. Jones said Dealpartners plans to expand into other e-commerce areas in the future. Letsbuyit recently made a moderately successful debut on Frankfurt's stock exchange.
Adabra's partnership deals -- providing an e-commerce service via "portal" sites such as Altavista UK -- have all been transferred to Dealpartners Network, which used the acquisition to launch its UK operations. All Adabra staff have become employees of Dealpartners, according to Jones.
Dealpartners has a presence in five European countries, but previous to the Adabra deal was most active in France, where the company operates group-buying sites for bonjour.fr, parissi.com, Xoom.fr and selftrade.com, among others.
For Adabra's e-commerce partners the deal works out as a simple name change, said Jones, but legally Adabra has folded its business and sold its assets to Dealpartners. Jones joins Dealpartners as European marketing director, the position he held with Adabra. Cofounder Paul Barnes will move on to other Internet ventures.
Adabra's partners will have the choice to keep Adabra's "e-group" brand -- such as "AltaVista e-group" -- or create their own brands, Jones said. Dealpartners operates only "private label" sites, meaning it provides underlying e-commerce technology and services and does not use its own brand on its partners' sites.
Clickmango, perhaps best known for employing TV personality Joanna Lumley as its figurehead, sold healthcare-related products and dispensed advice from health experts.
The company made the decision to shut down after failing to raise a planned £300,000 of funding, according to a report in the Guardian newspaper.
Investors have been far more sceptical about handing cash to dot-coms since the downswing in April. European companies such as boo.com, a streetwear e-tailer, have been forced to declare bankruptcy and call in receivers to sell off remaining assets. Even leading online companies, such as Amazon.com and Yahoo!, have seen their share prices plummet.
The new climate has also brought an abrupt end to sunny forecasts of an unimpeded road to an Internet future, and has forced startups to focus on making profits as soon as possible.
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