Auctionata failure

Auctionata

Online auction platform for art & luxury

Description

Auctionata was an online sales management firm and eCommerce organization that gave online closeout administrations of artistic items, extravagance collectibles, and others. Preceding each sale, Auctionata gave data to all things to be unloaded on its site. The auctions themselves were held in a TV-studio and streamed on the web. The closeouts were driven by an authorized salesperson and offers were acknowledged by telephone, on the web, by a truant offer, as well as from the studio floor. Auctionata utilized a framework created by its originators, enabling it to transmit the live video stream that provided a real-time working framework without delays. Auctionata was to directly to rival multinational closeout houses, including Christie's and Sotheby's. Since potential bidders never again needed to physically go to the sales, Auctionata's online sell-offs was a revolutionary innovation in the field.

Stats

Category
e-Commerce
Country
Germany
Started in
2012
Closed in
2017
Number of Founders
4
Name of Founders
Alexander Gilkes, Alexander Zacke, Georg Untersalmberger, Susanne Zacke
Number of Employees
251-500
Number of Funding Rounds
6
Total Funding Amount
$95.5M
Number of Investors
15

Cause of Failure

Auctionata's issues originate from its reported unethical behavior, lack of transparency and outright lies by former Auctionata CEO and his close partners.

After months of being in business, reports of management, operational and revenue challenges at the firm arose after an independent auditing company discovered that the auction house was making very few direct deals, members of the company bided on or even bought items on the live sales and the company heavily overstated the amount of profit and sales it made to the public. The organization claimed that the auditing report didn't bring into account private deals and other income streams. The truth of the matter was that none of Auctionata's purported record-breaking online deal accomplishments were ever upheld by real deals. It was additionally noticed that blunders of oversights were a routine at Auctionata which had an embarrassing Yelp! review of 1 star, with customers complaining of everything from delivery times, the alarming disappearance of the items they put on sale on the website (often to be found on eBay) to the complete unresponsiveness of the company representatives. Auctionata, from its part, had the propensity of cleansing all negative data from its records.

The absence of morals, administration mismanagement and the naivety of financial specialists were alarming factors, and so was the willingness of investors to keep funding the startup despite its increasingly dubious reputation and dealings. Auctionata ultimately failed to find new speculators thus filing for bankruptcy and closing down.

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