LevelUp CEO: ‘We Aren’t Running Out of Cash’
April 4, 2013
Boston-based mobile payments and loyalty provider LevelUp could be struggling for cash, despite closing on the second half of a $21 million round only eight months ago, according to a published report citing former employees and VCs. The report, from a local Boston online technology publication, suggests that layoffs at LevelUp have reduced the company’s headcount by half and it needs to raise more cash quickly.
In a relatively lengthy response on Twitter, LevelUp’s founder and chief executive Seth Priebatsch disputed the report’s contentions that the company has nearly exhausted its stake.
“We aren’t running out of cash,” he tweeted. “We raised $21MM less than 9 months ago. My sunglasses are pricey but not that much. And revenue is strong.”
He also fired back regarding the contention that LevelUp had halved its workforce from a high-water mark of “at least 162” quoted in the report to 80. Priebatsch admitted that the company has “let some people go” as they moved away from a dedicated outside sales force—shuttering remote offices in Atlanta, Chicago, San Diego and Seattle—but that the reporter overstated the case because the 162 figure included interns, co-operative learning students and contractors.
The report did not make the case that LevelUp won’t survive, just that it needs more capital. Despite rapid expansion and an ongoing contraction, VCs still seem to be optimistic about its prospects.
The company has built a payment network it says is offered by 5,000 merchants and used by one million consumers. LevelUp also recently announced an agreement with Heartland Payments System through which the New Jersey-based payments processor’s sales force will offer the white-label version of LevelUp’s mobile payment solution to its merchant clients.