Wesabe

Personal finance management website
Startup Cemetery
GENERAL INFORMATION
Category:
Finances
Country:
United States
Started:
2005
BUSINESS FAILURE
Outcome:
Shut Down
Cause:
Bad Management
Closed:
2010
FOUNDERS & EMPLOYEES
Number of Founders:
2
Name of Founders:
Jason Knight, Marc Hedlund
Number of Employees:
10-50
FUNDING
Number of Funding Rounds:
2
Total Funding Amount:
$4.7M
Number of Investors:
2

What was Wesabe?

Wesabe is a former Personal Finance Management system which served its clients by helping them make better financial decisions by analyzing the client’s available financial options based on the data that the clients provided Wesabe with. The actual Wesabe web application also integrated community forums which include a dozen other people who are devoted to making smarter and better financial decisions.

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Why did Wesabe fail and shut down?

The tragic downfall of Wesabe can be ascribed to two major reasons.

To understand the first one, we need to talk about Yodlee. Yodlee is a company that offers an automatic data aggregation system for PFMs. This was usually done by screen-scraping the client’s bank account website activity on the supported bank corporations by Wesabe. This information is then transferred to the PFM's own platform for them to analyze. On a meeting with Wesabe, both parties never agreed to close the deal since Wesabe referred to Yodlee as a “crumbling corporation” and was afraid they wouldn’t be able to follow through. Because of these instances, Wesabe opted for a different solution. Instead of working with Yodlee, Wesabe chose to make their own data acquisition program which was to supposedly have better privacy settings for clients. This move, however, later resulted in Wesabe losing to Mint - their main competitor- since Wesabe’s data acquisition system was never fully finished. Instead, when Mint launched into the market a few months after Wesabe, it had its own data aggregation system, all thanks to its partnership with Yodlee.

Apart from that, there was also the fact that Mint provided a better and easier user experience. Mint’s system automatically categorized and edited the client’s data which resulted in a better consumer experience. While Wesabe’s clients needed to fill out more fields on sign-up forms, which was a little bit of a hassle for most people who often opted for the easier choice even though Wesabe’s platform was more precise and would have helped them make better financial decisions on the long run.

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