IoT Startup Skully Shuts Down Operations After Founders Squander Company Funds

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The California-based IoT startup Skully, known for its claims of building advanced motorcycle helmets using augmented reality and other present-day technologies, confirmed in a mail that it had run out of funds and couldn’t carry operations anymore.

According to TechCrunch, the decision to shut down operations came a couple of weeks after Skully’s board forced founders Mitch and Marcus Weller out of the company. A few days after this decision, the engineering team and other employees of this IoT startup were asked to leave the company without any prior notice. Skully’s website sales for augmented reality helmet have also been shut off immediately.

What Skully Employees Have To Say About It?

The Weller brothers used the company funds for their personal usage, which eventually led them to this situation. Things became worse when their executive assistant, Isabelle Faithauer, filed a lawsuit claiming that both the founders used Skully as a tool to get rid of their personal expenses. Many others have backed her words.

In her complaint, Faithauer stated that Wellers forced her to do fraudulent entries in company’s books of accounts related to-

  • Rent for their personal apartment located in Marina
  • Security deposit for another apartment in Dogpatch
  • Expenses on weekly apartment cleaning
  • Expenses on personal grocery bills
  • Expenses on restaurant meals for both of them
  • Many other miscellaneous expenses

A few sources inside Skully confirmed that the company had run out of money due to misuse of money by its founders. As a last-minute attempt, the IoT startup tried to sell itself to LeSport, a subsidiary of Chinese conglomerate LeECo, but things didn’t work out due to what Wellers had done to the company.

Also Read: Top accelerators for IoT startups in India

Skully raised close $2.5 million in crowd funding so that it could manufacture augmented reality motorcycle helmets having the heads-up display. It also claimed to raise more than $11 million via venture financing.

Light At The End of Tunnel For Skully Investors

Skully has decided to file for Chapter 7 bankruptcy, which makes it almost impossible for customers to receive a refund of the pre-order amount of $1500, which they paid for AR helmets.

However, it’s not the end of the story for the customers of this IoT startup. The smart bike tool maker and Skully’s rival Fusar has come ahead and offered a credit equivalent for the entire sum that Skully customers paid. Although they won’t be able to redeem the entire amount instantly, Fusar will give them the opportunity to recoup the entire value over time.

We’ll keep you informed with more updates.

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