A one-time darling of the local start-up scene has shuttered operations and sought debt relief in Dane County court, according to published reports.
Alice.com — an online retailer that let manufacturers sell household products directly to consumers — had raised over $18 million from investors and at one point counted more than 30 employees at its Middleton headquarters.
The privately-owned company was launched in 2008 by Brian Wiegand and Mark McGuire, who previously had founded Jellyfish.com. That online discount shopping site was sold to Microsoft in 2007 for a reported $50 million, enriching initial investors as well as the founders themselves.
“They were doing business in a highly-competitive field with a lot of big-names like Amazon and Google,” said Ken Johnson, managing director of Kegonsa. “This one just didn’t work out.”
Johnson said Kegonsa had risked less than $1 million on Alice with the full knowledge that not all investments will pan out. For venture capitalists, the hope is that one good bet can offset several bad ones.
Before news of the problems went public, Wiegand and McGuire were featured speakers at the Forward Technology Festival held two weeks ago in Madison. They headed a small business panel titled “How to start-up a web company that Microsoft wants to buy.” Wiegand has founded and sold two other web-based companies in addition to Jellyfish, according to WTN Media.
McGuire in an email said he left his operating role at Alice about two years ago and is not in a position to provide any details on the bankruptcy. Wiegand could not be reached for comment.
Both have moved on to other ventures: Wiegand now heads Hopster, which offers shopping coupons online. McGuire is co-founder of Nextt, a private social network that provides an alternative to more public forums.
City of Middleton officials said Tuesday they were unaware of the Alice developments. The firm has been located in an office building at 8215 Greenway Boulevard.
“It was news to me,” said city administrator Mike Davis. “I know they had been renting space from T. Wall but that is about all I know.”
T. Wall, a Middleton-based real estate firm, was involved with Alice via its DaneVest Capital fund.
But Alice was also successful in raising money from outside its home turf. One of its largest single investments came in early 2012 when a Spanish group put $3.6 million into the business after Alice had merged with a Spanish company, Koto.com.
Alice was touted as a way to let companies sell toilet paper, laundry detergent and other products via the Internet at lower prices than conventional retailers. It had partnered with manufacturing giants like Proctor & Gamble, BIC and 3M.
In addition to charging fees to manufacturers, Alice looked to profit by selling consumer information and getting customers to use company coupons.
The most recent records show that Alice had annual revenues of $7.3 million with 76 employees, including in Middleton and a distribution center in Indiana.
The court filing for Alice is technically a receivership, which is a state version of a bankruptcy where an outside party is appointed to oversee dissolution of a company’s debt.
The receivership petition includes two cases: one for Alice and another for its holding company, according to the Milwaukee Journal Sentinel.
In its filing, Alice lists $1.4 million in assets and $7.6 million in liabilities. Of the debt, $6.7 million is owed to the holding company. The holding company petition lists another separate $5.8 million in debt.
Milwaukee attorney Michael S. Polsky has been appointed receiver by the court.