Inventions community Quirky has filed for bankruptcy protection, marking one of the brightest flameouts of late for a venture-backed company.
Quirky, an online platform for inventions, had hauled in about $170 million in equity investments from a who’s who of Silicon Valley venture firms, including Andreessen Horowitz and Kleiner Perkins Caufield & Byers, according to industry tracker Dow Jones VentureSource.
Since the start of 2013, only two U.S. companies have gone bankrupt or shut down that have raised more capital than Quirky, namely Better Place and Coda Automotive, respectively, both in 2013. Andreessen Horowitz-backed fashion startup Fab Inc. raised more than $300 million and sold part of it for low tens of millions, according to The Wall Street Journal.
While the specific details of Quirky’s unraveling remain unclear, the investment from Andreessen Horowitz one of the biggest black eyes for the venture firm since its portfolio startup Fab flopped.
The startup struggled to deliver products at scale and stumbled with distribution, according to a source familiar with the matter. Parcel delivery service UPS is listed as the third-largest creditor in its bankruptcy filing, seeking $1.3 million.
Quirky filed for chapter 11 with plans to part with its Wink business, a smart home hub that wirelessly connected door locks, lights and other home devices with smartphones. The company, which filed in the U.S. Bankruptcy Court for the Southern District of New York, said it had plans in place with an affiliate of Flextronics International Ltd. for a $15 million deal, which will be tested at auction.
The sale of Quirky’s assets underscores an unknown future for Wink, whose aim to usher in the smart home era offered a promising avenue for Quirky investor GE Ventures , the venture arm of General Electric, which offers high-end light bulbs that worked with its system.
The startup is also seeking a home for the remainder of its assets, stating it hopes to preserve its online invention community but will discontinue all of its business lines that can’t be sold at auction.
In addition to investors Andreessen Horowitz, Kleiner Perkins Caufield & Byers and GE Ventures, Quirky’s venture backers included Arizona Bay Technology Ventures, Atlas Venture, Countour Venture Partners, FreshTracks Capital, Lowercase Capital, Norwest Venture Partners , RRE Ventures, Village Ventures and individual investors.
RRE Ventures, Kleiner Perkins Caufield & Byers, Norwest Venture Partners and Andreessen Horowitz didn’t respond to a request for comment.
The company filed for bankruptcy a month ahead of the maturity date of its $19.9 million revolver. It also faced $8 million in deferred payments related to its acquisition of Undercurrent LLC that would begin coming due in December. Undercurrent is a consulting services provider that Quirky purchased last March.
Additionally, Quirky has a $9.3 million secured term loan and $36.8 million in unsecured bond debt. Trade creditors are owed an additional $28 million.
Quirky was founded as an invention platform in 2009 by Ben Kaufman. Mr. Kaufman was replaced as CEO last month after Quirky laid off 159 employees and as it became clear that the company’s efforts to sell its Wink business could only be executed in bankruptcy. As of Tuesday, Quirky employed 90 people.
–Stephanie Gleason contributed to this report.