Photo-Sharing App Color Shutting Down, Sold for $7M After Raising $41M

All good things come to an end. Bad ones do too. After denying rumors last month that it would soon be shutting down, the over-funded photo-sharing app Color has now announced that it will indeed be shuttering its service.

A notice displayed at the top of the Color website states,

Alert: We hope you’ve enjoyed sharing your stories via real-time video. Regretfully, the app will no longer be available after 12/31/2012.

Although it raised a staggering $41 million in funding last year, the app was never very popular among photo sharers, losing out to companies that raised far less but offered far more (Instagram, for example).

Company CEO and serial entrepreneur Bill Nguyen now has a pretty nasty mark on his resume: TechCrunch is reporting that Apple only paid $7 million for Color’s “20 person technology team and some of its key intellectual property assets” — an order of magnitude less than the hundreds of millions (or even billions) that the investors were undoubtedly hoping to see when they pumped $41 million into the pre-launch startup.

It gets worse, though: TechCrunch is also reporting that a former employee is suing Color and Nguyen for “humiliation, mental anguish, and emotional distress.” The lawsuit has some pretty nasty accusations against Nguyen:

In or around late 2011, [then Color CFO Alyssa] Solomon began noticing discrepancies in Color’s finances. Upon information and belief, Defendant Nguyen was spending corporate funds on numerous personal items, such as charging personal items on Color’s American Express card and putting his family’s nanny, Sally Orr, and his family’s Lake Tahoe‐based ski instructor, Hillary Governer, on Color’s payroll.

In retaliation for Solomon’s investigation into his misuse of Color’s corporate funds and other fiduciary misconduct, Defendant Nguyen expressed his intent to fire Solomon in front of Color employees on numerous occasions. Color employees, including Plaintiff Witherspoon, had no doubt that Solomon was on her way out as a direct result of Nguyen’s vindictive threats.

That sounds strangely familiar.

  • jdm8

    So they raised $41M, how much did they actually spend to start and run the company?

  • Swade

    Suing somebody for not breaking a law, but stressing you out. What is America coming to? Country of moochers.

  • hugh crawford

    You don’t sue someone for breaking the law , that’s a criminal case not a civil case. And the plaintiff is a co-founder of the company ( and the way startups work a stakeholder ) who probably got screwed out of a few million dollars if indeed the CEO was looting the company. Yes, lots of CEOs are moochers but that’s capitalism for you.

  • Ano

    Yeah, it’s called harassment.

  • eraserhead12

    Aand once again, Apple stifles future innovation and creativity by hoarding intellectual property.

  • Timothy Burgin

    What are you talking about?? Apple has a reputation of buying up very few companies compared to MS, Google, etc.

  • Timothy Burgin

    Probably most of the $41M… why else would they be selling out for so little?

  • eraserhead12

    so? you know when Apple has the intellectual property, they’re not allowing any open-source usage. If ‘rectangles with rounded corners’ is just cause for a lawsuit, anything is.