Reverse-auction site Dropit is going back to its original stadium market having burned through $5m in funds from investors including Rich Listers Roger Lampen and Adrian Burr with little to show for it.
But co-founder Peter Howell says the company has just raised new funds and is lining up new customers for what he describes as a new, improved version of its product.
Howell would not say the exact amount of the new raise, closed October 18, but he told the Herald it was "more than $500,000."
He would not give a private-equity valuation, but conceded it was a down-round - startup-speak for money raised lower valuation than early rounds.
In 2017, when Dropit raised US3.6m (just under $5m at the exchange rate of the time), reports had the startup valued at $30m.
The Bay of Plenty-based Howell said Dropit had closed its Miami office and was now run out of a single NZ-based office.
Staff had been scaled back from 24 to seven. Howell said a move to a SaaS (software-as-a-service) model meant his company could run on a leaner model.
Dropit was flying high in 2017, with customers including NZ Cricket, the Breakers, the Warrior, the Melbourne leg of the Formula 1 circuit and the Phoenix Suns NBA franchise in the US.
There was also some Major League Baseball action in the US for Dropit - which ran 60-second, reverse auctions during gaps in the action. In something of a game of chicken, the price go lower and lower on a big screen. One reverse auction at a Major League spring training session in the US in 2017 saw a Ducati Panigale 959, worth $20,900 sold for $5301.
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And even earlier this year, Dropit appeared to be on-a-roll as former Netflix marketing director Joel Mier signed on as a director, joining US fashion industry figure George Carrera.
In May, Mier told Stuff that Dropit could be generating revenue of $1b within three years.
But by the end of August, Peter Howell was the only director.
And this week, he told the Herald that none of the sports organisations listed above were still customers - although an unnamed former customer had just re-signed and that he had several new deals in the pipeline.
So what went wrong? Why did the Phoenix Suns and others ditch Dropit?
Howell said the Suns and other customers wanted to incorporate Dropit's features into their own apps rather than have their fans download and install Dropit's app on their phones.
He made a "business decision" that he wanted Dropit to remain a standalone app.
Now, Howell says his company's new SaaS model means it can be integrated into sporting bodies' own apps, with WebView technology used to register a person for Dropit before they are returned to a host app. He expects this new version of Dropit to be ready by December, with new customers up and running in January and February.
Whereas the earlier version of Dropit was labour-intensive, requiring flyers to be handed out around a stadium to persuade people to install the app on their phones, the new version was a lot more automated, Howell said.
Why did the heavyweight Netflix alumnus Mier quit?
Howell said Dropit has been running as a general marketplace, via its app, selling clothes, perfume and other goods by reverse auction.
The renewed focus on sport with the pending SaaS version didn't suit Mier, Howell said. Mier had a business-to-consumer focus while the new model was business-to-business, with Howell approaching sporting organsiations and stadiums himself, given there was only a few hundred target customers. (Mier did not respond to requests for comment).
Carrera also had a consumer focus that was no longer relevant, Howell said.
Peter Howell founded Dropit with his older brother Bendan in Mt Maunganui in 2015. Brendan Howell served on the board and ran the Miami office that became the startup's headquarters for a period. He is no longer working for the business or on the board but remains a small shareholder.
The younger Howell says he's excited about the new version of Dropit, and says 30 to 40 deals are in the pipeline.
He said he said new board members would be named shortly.
Lampen declined the opportunity to comment, referring questions to Howell.