It’s over-and-out for HearMeOut as social media app closes down after burning $4m
Social media app HearMeOut has gone silent after sacking its staff and shutting the doors.
The app — a kind of audio version of Twitter that let users share 42-second audio posts — raised $6.5 million in an Initial Public Offering 18 months ago.
It burned through about $4 million of shareholder cash without ever making any money — and was perhaps best known for signing up US broadcaster Larry King.
The Israeli tech firm’s shares (ASX:HMO) stopped trading in May when it launched a “strategic review”.
“The board wanted to determine if a viable ‘business case’ existed for the platform in its current state. Unfortunately, [that] could not be found,” the company later told investors.
It’s now killed all influencer and marketing contracts and shut up its Israeli operations. All staff will finish up on July 12.
HearMeOut hopes to save $US200,000 a month by shutting up shop.
The review found that it couldn’t afford to reach the scale HearMeOut needed, and the board would have to find a way to extract what value they can from the company’s assets.
The company hired a PR firm ahead of its US launch in March last year, plus advisors and “influencers” including a US TV executive, the head of connected services at Ford, along with talent such as a 14-year-old known as “Cash Me Outside girl” and “Bhad Bhabi” who found fame as a spoiled teen on Dr Phil.
The app was synced to Ford’s in-car app — but so were Snapchat, Facebook and other more established social media platforms.
HearMeOut never took in any receipts as a listed company.
The only revenue recorded was from interest from a savings account, totalling $14,782.
Its cash burn rose by $100,000 each quarter and although the company tinkered with the app and co-developed a prototype that would allow drivers to use the app in any car without needing to be approved by the carmaker’s syncing app, it couldn’t keep the circus moving.
In its valedictory quarterly at the end of March, HearMeOut said it had $1.9 million in cash.
HearMeOut once touched its 20 IPO price, in October last year, and is suspended at 6.8c.
“With costs associated with the platform greatly minimised (and stabilised) it is the intention of the board of the company to determine what value, if any, can be achieved from the platform and users, the IP [intellectual property] associated with the platform, data collected and key strategic contracts,” the company told investors.
Stockhead is seeking comment from HearMeOut.