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Wheelhouse Corp. is winding down its CRM services business and looking for a cash infusion to keep its fledgling software business going, the company confirmed Friday.
“We certainly have cut back dramatically,” said a somber Frank Ingari, founder, CEO and chairman of Wheelhouse, in Burlington, Mass. “Were finishing all our projects and exiting that [services] business, but were continuing to try to fund the software part of our business. Were just trying to find an investor.”
Ingari said Wheelhouse would need about $5 million to keep its software business going for another year and had 60 days to secure new funding. He said the company has a West Coast backer lined up, but that investor wants an East Coast-based partner before it will commit to funding the company.
Wheelhouse was founded in 1999 and has since burned through about $74 million in funding, Ingari confirmed. The company is now all but out of cash.
“We had a very ambitious business model,” said Ingari. “We were trying to grow a hosted services, managed services and enterprise software business, and that consumes a lot of capital.”
Such a capital-intensive company can no longer get funded in the current investment atmosphere, Ingari said.
“We got caught in a cash squeeze.”
Ingari said existing Wheelhouse services customers–and he concedes there are few–will be transitioned to other service providers or have their applications turned over to them.
“Our customers will be taken care of,” he said.
He declined to say how many Wheelhouse employees will lose their jobs as a result of the cash crunch, but said the company is down to 35 employees from a peak of 200, and that number will continue to fall.
Wheelhouse entered the enterprise software business in March with the release of its CRM Director product, a tool for integrating data from and managing disparate CRM applications.
Ingari said at the time that the software release was a natural evolution for Wheelhouse, part of the companys long-term plan to deliver a software product built on the companys developed expertise in CRM services.
Wheelhouse has “just a couple” of customers for CRM Director so far, Ingari said.
“We messed up by running out of money exactly as we were launching a new product,” he said.
“Its a very attractive product, with good ROI,” said Ingari. “If we can get funding, Ill be very excited about it.”
Wheelhouse is also open to acquisition if new funding doesnt come through.
“Whatever would be a good outcome for our investors,” Ingari said.