Tech Industry

Chaos and confusion reign at hyped startup Color

Despite reports of its demise, a representative says Color is not shutting down.

Color co-founder Bill Nguyen

Color Labs, according to a representative authorized to speak on the company's behalf, is not closing down.

But for now, that's about all that's clear at the chaotic startup that is Color. Even the representative who issued that statement said he's dealing with the press only because the person who held that job just left the company.

Color app Color

His statement comes after Venture Beat this morning reported that a Color vice president had sent an e-mail to employees saying that Color was winding down. "Last week, the Board and major shareholders voted to wind down the company," the e-mail said, according to Venture Beat.

Well, it looks like an e-mail might have gone out to someone, but details about it are vague at best. The representative, who talked on behalf of Color and its largest investor, Sequoia Capital, wouldn't comment about it, though a person connected with Color said the company is investigating the source and content of the e-mail.

What's sad, at least for Color and its investors -- who backed Color to the tune of $41 million in March 2011 before it even launched -- is that word that Color was closing wasn't at all surprising.

Color made a big splash when it launched last year as a location-based photo-sharing app for iOS and Android. It had a charismatic founder, Bill Nguyen, who built and sold streaming-music service Lala to Apple. And it won big backers, not just Sequoia but Bain Capital and Silicon Valley Bank.

Color, based in Palo Alto, Calif., quickly gained attention for its free-spending ways. The app has failed to gain many customers; it has just 460,000 monthly users, according to AppData. And last month came reports that Nguyen was no longer actively running the company. The representative said he couldn't talk about the leadership of the company. CNET has sent Nguyen an e-mail seeking comment.