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Capazoo lays off 60, shops itself (50)

March 19th, 2008 · by Heri · startups, web2.0

In yet another dramatic but expected turn of events, Capazoo, the “black sheep” of startups in Montréal, has layed off all of its development team late last week. 60 developers, mostly .Net programmers, were asked to leave the premises immediately, and all that was left was a sysadmin to run the whole system. The official explanation was that it’s because of the legal problems between the Verville brothers. The judge refused to come up with a final decision and ruled that Capazoo’s shareholders should settle the dispute between the two co-fonders. But there was no settlement, and nobody is officially running the company.

Roberto Rocha also reports that there is now a “a louer” (to rent) sign in front of Capazoo’s offices, and I was also told that remaining employees were layed off Monday. There are also rumours that Capazoo is trying to shop itself, to a Toronto-based venture fund interested into acquiring the technology behind Capazoo.

For those who didn’t get the story, the Capazoo adventure was started 2 years ago. It was advertised by its founders to be the next Facebook, and the founders proclaimed they would reach $650millions monthly revenues. Soon, they managed to get funding from athletes and wealthy individuals, up to an announced $10.6 million. The fact though is that audience and revenues never came, probably because the “executive” team knew nothing whatsoever about technology and how to design and market a web product.

So here we are. Lots of talk, lots of money, lots of weird ideas and creative “marketing schemes” thrown around, and now the end of a local company … which, in my opinion, doesn’t even deserve a post on Montreal Tech Watch. But I guess we have to write down history and facts so as the next new entrepreneurs would learn the lesson.

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