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Friday, September 22, 2017

uBeam Funded? Or on Fumes?

It's seems uBeam have been in fundraising mode these last few months - the newspaper articles, the demos, the apparent closure of the San Jose office, and that the last known round was in summer 2015, all point to an ongoing fundraising effort. It happens to all startups - you get profitable, you get another round, or you go out of business, no way past that. As far as I know there's no product, so uBeam need to fundraise. There's been no indication of how that's been going (publicly, I've spoken to plenty of people in the VC industry, it's interesting...) - until now.

It seems that the building that uBeam use as their headquarters is going to be available for rent from January 2018. Not just some of it, it seems to be the whole building. You can see the ad here on Loopnet, and there's a "For Lease" sign out front right now.


So what could this mean? A few things stand out as the strongest possibilities - uBeam has raised (or has nearly raised) their next round and are ready for their next expansion and are preparing to move to larger premises, or they're taking their time in negotiating a renewal and the landlord is being cautious to ensure no voids, or simply they don't have the money to commit to a long lease and the landlord is seeking the next tenant.

It could be any of these, or some other innocent explanation. If it's preparing to expand they must be about to hire a lot more people, however their usual job ads haven't changed. If you look here it's the same three key positions of Lead Acoustic Engineer, Lead Systems Engineer, and Lead Hardware/Software Engineer (seems kinda key to have those people...). Perhaps they're so busy signing the next round and counting the money they forgot to put the job ads up, and with my reminder they'll do so in the next few days. All production, sales, and marketing perhaps, since they have to be ramping up to consumer sales soon. Right?

Seriously, I do expect that they will get some funding, though the mix of cheque size, valuation, and % equity is something I've never been able to make work in my head with rational numbers. But I'm just a dumb engineer, what do I know? So it's most likely that they are in discussion trying to get a round signed, that can take some time if it's large. And that would be just as well for a few reasons. If there's no deal on the table from a VC yet, knowing that the company is on a timer to get funding can weaken the negotiating position, but even more importantly can you imagine coming to work as an employee and seeing that "For Lease" sign outside? You'd worry that your job was about to disappear, and begin to look for other work, and that can kill a company. So if they're working through that paperwork, management can tell the team:

Don't worry, we're just working out the details and the next round is imminent.

Of course, if you've been around startups long enough you know that even up to the day the money runs out the employees can be being told:

Don't worry, we're just working out the details and the next round is imminent.

I don't know which it is - Funded or Fumed - but it looks like we'll know by January 2018 at the latest.

Oh, and if you're looking for office space in the area, I'd suggest looking at the place - the office, the location, and the landlord are all awesome.

Update 28th Sept: There's a possibility they may be consolidating in the old uBeam offices in San Jose. These are offices that look to have been leased in Q1 2016, around 8500 sqft for 3 people, and then closed less than a year later (see here for details, last page). Loopnet lists the office as available since Feb this year, but still available. I had thought they had been subleased, but perhaps not. If that's the case, the company has been paying likely around $40k a month for an empty office, and if the lease in Santa Monica runs out, they may be in a position where there is no choice but to move to an office that they've had sitting empty for most of a year.

If true they'll have opened an office, closed it, and opened it again all in the space of less than 2 years, having paid near $500,000 for it to sit empty in the interim.

3 comments:

  1. Are there suddenly are a bunch of surplus office desks for sale at the local startup liquidator I wonder...?

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