Onswipe fails to gain traction with publishers, sold to SF-based Beanstock Media
The launch of Onswipe was one of those super-hyped events that happen occasionally. The company’s online publishing platform would be the perfect vehicle for reaching new tablet owners – a cross between a blog platform and then newly launched Flipboard. Or at least, that was the story in the summer of 2011.
I was not impressed, writing “For me, I love these new alternatives to native app development. But I don’t see them as replacing native apps, just an another option for publishers to consider.”
The launch of Onswipe came when many were looking for alternatives to app development. The Financial Times, for instance, had abandoned native apps for web apps, something that worked for them, just as native apps worked for the WSJ – the key, it turned out, wasn’t the platform, it was the content. Financial news is like that, people will pay for it.
Now Onswipe has been sold. (I missed the original news on this, but a fresh press release alerted me.)
The buyer, Beanstock Media, is a San Francisco-based company led by Jim Waltz. Waltz has worked at Traffic Marketplace, AdModus and DoubleClick. No doubt the acquisition is all about gaining more real estate for its ad network, and the fact that the sales price would have been negligible as Onswipe was struggling with cash.
The tech crowd loved the idea of Onswipe, just has they have Flipboard and other solutions. But the platform never made any sense for anyone employing an editor as the platform is driven by RSS feeds, a solution that often leads to minor news as the top story. Digital First Media, for instance, has moved to an app provider that creates digital editions similar to Onswipe leading to newspaper apps that look look neat and organized, but often ridiculous when some minor dog bites man story becomes the lead for hours at a time.
(Onswipe has added CMS crawl mirroring which allows for more accurate ordering of stories.)
According to Fortune, Onswipe was generating about $500,000 a month in revenue, with the company able to keep half of that amount. That might have been OK for a one or two man operation, but Onswipe had raised around $11 million in first and second round funding, then secured a $2 million bridge note. The investors, which include QED Investors and Spark Capital, will now have to settle on getting a piece of that investment back.
Part of the deal, apparently, includes Spark Capital getting a piece of Beanstock.
“Spark Capital has been a long-term and very collaborative investor in the Onswipe platform and team,” said Alex Finkelstein, General Partner, Spark Capital. “The potential of Beanstock is immense and exciting – we’re very happy to be a shareholder in the combined company – and know that this is a great fit for both companies as Beanstock continue to grow.”