RadiumOne, once a high flyer in the advertising technology world, has less than three months of cash left and is being turned down by dozens of investors.
That’s what two anonymous inside sources are telling VentureBeat tonight. Both said that the company hired RBC three months ago to lead its new investment round, but the investment bank has come up bare.
But, late this afternoon, an email from the current CEO went to all RadiumOne employees flatly denying the supposedly bad news.
The company was reportedly on track for an IPO at the time of the firing.
The reason for the company’s current state, according to one of the sources, is because “adtech in general is hurting in the public market” and represents “a risky investment.”
“Nothing in ad tech is being funded right now,” the source said, pointing to the plummeting stock price of Millennial Media.
“Adtech left a bad taste in the public market.”
Additionally, the source said, RadiumOne has failed to “continually reinvent” itself in the adtech industry, which values new approaches.
RadiumOne should enter a “down round” where investment is sought for a lower valuation, the source said, a “process they’re going to have to start now.” The next week or so will determine if the company will survive, the source added.
Our second source confirmed the same information.
This afternoon, current chief executive William Lonergan sent an email to all RadiumOne employees, apparently in response to emails this reporter sent to various employees. We were seeking their comments about an anonymous email VentureBeat received late yesterday, which is referenced in Lonergan’s message to the staff.
That anonymous email, purportedly from a RadiumOne employee who was not one of our two sources for this story, claimed the company had less than three months of cash, and pointed to the company’s involvement with RBC.
Here is Lonergan’s email in full. The company said this represents its statement on this subject:
From: Bill Lonergan
Date: Fri, Mar 27, 2015 at 3:56 PM
Subject: Recent email inquiry
Some of you received an inquiry from a reporter about the state of RadiumOne and its current fundraising effort. The reporter is seeking to confirm claims in an anonymous email he has received that the company is in financial trouble. I want to COMPLETELY reassure you that the claims in the email are TOTALLY false. Here are the facts:
- RadiumOne has retained an investment bank to assist with fundraising that would support the company’s growth strategy and we are still in that process. We are absolutely confident we will successfully raise the investment funds as planned;
- The company is not in any financial distress. In fact we’re on track for a strong Q1 with major brands committing more to RadiumOne than ever in our history; and
- Jobs are not at risk.
I have just landed in SFO and I am happy to talk individually with anyone who has further questions but I encourage all of you to disregard this mean-spirited attempt to undermine RadiumOne and our continued success. PLEASE do not allow yourself to be distracted by this nonsense. Thanks, Bill.