It was just two weeks ago that we told you about Skully’s investors ousting brothers Marcus Weller and Mitch Weller from the San Francisco startup, and today TechCrunch reports that the motorcycle helmet company will be rather swiftly closing its doors.
A&R readers may remember that Skully’s latest delay to market stemmed from the Skully AR-1 helmet not being ready for mass production, despite the nearly $15 million raised through seed money and a Series A funding round, which was led by Intel Capital.
As such, the closure surely stems from Skully’s investors choosing to shut down the company’s operations, rather than rebuild Skully’s tarnished reputation and retool its product for mass production.
According to TechCrunch, operations at Skully have already ceased, and the website is expected to go offline later today, though as of this writing Skully’s website remains, and its social marketing team is still on Facebook cooling the heels of angry customers.
“We’re disappointed Skully has closed its doors. We’ve been focused on the company’s success for nearly two years and have recently been trying to negotiate a funding round to keep it going,” Intel Capital told TechCrunch in a statement.
“We’re certainly sorry for the employees who are losing their jobs, the crowdfunding backers whose investments didn’t work out and the customers who’d pre-purchased product. We continue to be excited by the promise of this kind of wearable technology,” the investment group continued.
Before this announcement, Skully was said to be looking to raise a Series B round of financing, and was also in talks with the Chinese company LeSports about acquiring Skully.
Depending on who you ask, the acquisition deal with LeSports was either doomed by the term sheet given to Skully’s board of directors, or by the company’s rapidly deteriorating financial and market position. Either way, there seems to have been zero exit for Skully and its investors.
Despite Skully’s continued declarations of helmet deliveries later this month, sources familiar with the matter told Asphalt & Rubber that there wasn’t enough funding in place for Skully to fulfill those orders, nor had the design issues with the Skully AR-1 been addressed adequately.
There is also reason to believe that the Skully AR-1 had not been certified by the European ECE 22.05 standard, despite what Skully’s marketing materials suggest, due primarily to ECE standards forbidding structures near the rider’s eye.
It should be noted that D.O.T. certification in the USA occurs after the helmet has entered the marketplace in sufficient volumes. As of this writing, it is understood that 50 helmets, or fewer, have made into the hands of Skully customers, VIPs, and social media evangelists. Though again, Skully has been cagey on quoting exact figures.
Interestingly, many of the people still waiting for their Skully AR-1 helmet actually come from the company’s Indiegogo fund raising campaign. However, a little-known fact with the Indiegogo terms of service actually makes Skully not obligated to fulfill its “gift” promises to backers.
Today’s news means that those investors, not customers, will be out of luck in terms of getting a physical product in their hands. Pre-orders made through the Skully website will likely see a similar result, which means over 1,500 people will be left without the helmets they were expecting to receive.
This news is surely tremendously disappointing to motorcyclists who were eager to see the Skully AR-1 come to market, however it is also not terribly surprising to anyone who has personally dealt with Skully, or the Weller brothers.
The company’s disingenuous approach to doing business should have been a red flag to anyone paying attention in the motorcycle industry. Unfortunately we here at Asphalt & Rubber are not the least bit surprised to hear today’s news as the final outcome for Skully.
As always, caveat emptor.