UPDATE: A source familiar with the situation says BuyWithMe founder Andrew Moss based layoffs on a list of employees he liked and didn’t like.
An employee of BuyWithMe who was laid off today, along with what he estimates to be about 55 percent of the staff, says the company went under because it got greedy.
“They were trying to raise a hundred million dollars at a $500 million valuation and there were no takers. If they had done a more conservative round, the company wouldn’t be in this kind of trouble.”
This employee says there is no hope of raising a round now and that the company is looking for a buyer. “They are hoping to just sell and get some of the value back.”
BuyWithMe had been on a buying spree itself, acquiring six companies in the last six months. “The only one they paid a lot for was Edhance. And that company is the only reason a buyer would be interested.”
The employee said people were expecting news around Thanksgiving, but today’s layoffs come as a big surprise. “We had no idea. They didn’t offer us severance or anything.”
Asked whether this was a reflection of conditions in the daily deal / group buying industry as a whole, our source demurred. “Nobody has figured out a profitable model yet, but if someone does, then maybe they could make it work.”