Payment Card Startup Plastc Took $12.7 Million From Investors and Customers ... and Then Just Disappeared
Angry customers who gave smart credit card company Plastc $9 million in pre-orders and then abruptly shut down are hoping to sue the company. Venture capital investors had also sunk a reported $4.3 million into the fintech startup.
Plastc promised its card device could store information from up to 20 other payment cards, saving customers the bother of carrying wallets filled with different cards. But the Palo Alto, Calif., company announced yesterday on its site that it was considering bankruptcy, after failing to close two series A funding rounds. It has "let go" all of its employees and shut down its social media channels.
Now Plastc's customers want to file a class action lawsuit against the company, which they describe as "a scam." Each card cost $155, and in its terms of conditions Plastc stated that pre-orders were "non-refundable." It hasn't said whether it will give money back to customers.
One angry customer has set up a Facebook page called "Plastc Class Action Lawsuit", and is encouraging others to join the case. According to one update: "A class action lawsuit is being started against Plastc to ensure anyone who pre-ordered will receive their money back."
A later update advises disappointed backers to keep copies of all their communications with Plastc on file.
One commenter wrote: "I don't care about the $155 but I want this clown to be held accountable even if the lawyers are the [ones] that get paid. It does seem this was a scam for a while since [CEO Ryan Marquis] was always very evasive. There is no way investors would pull out from this days before shipping but I'm sure they saw something we don't know about that hopefully would come out in the legal proceedings."
There is little trace left of Plastc online, except for furious customers commenting on Twitter, Facebook, and Reddit.
The company shut down its @PlastcInc Twitter handle in the last 24 hours and deleted the PlastcInc Facebook page. CEO Ryan Marquis also deleted his personal Twitter account. All that's left of Plastc's website is a notice titled "We Regret to Inform You..." and the company's full statement, which you can read below.
If you search for "@PlastcInc" on Twitter, you'll see lots of comments like this:
@PlastcInc You guys still in business? Support line states: "This number is not in service at this time".— Rai Navakas (@raiusa01) April 20, 2017
@PlastcInc please provide an update via Twitter or Facebook. People are getting concerned due to no communication since Q2 started.— BAPD77 (@BAPD77) April 10, 2017
According to Crunchbase and other public records, Plastc's venture backers invested $4.3 million in the company. Backers included Mitsubishi, Grayhawk Capital, Peninsula Ventures, IncWell and ZenStone Venture Capital. Of these, IncWell and Greyhawk Capital list Plastc among their portfolio companies, while Peninsula Ventures partner Gregory Ennis is listed as a Plastc board member.
Here's the notice from Plastc in full:
We Regret to Inform You...
For the past 3 years, our mission here at Plastc was to build and deliver the most technically ambitious smart card on the planet. After making enormous leaps in development, product innovation and progress towards our goal, Plastc has exhausted all of its options to raise the money it needs to continue.
Plastc, Inc. is exploring options to file Chapter 7 Bankruptcy and will cease operations on April 20, 2017.
While we have fallen short of our goal, we are proud of our team and the effort that went into developing a working Plastc Card. However, without the necessary capital to continue, all employees have been let go, which means that Customer Care and Social Media channels are unmanned or have been shut down.
How We Got Here:
We were expecting to close a $3.5 million Series A funding round on February 28, 2017. There are functioning Plastc Cards, which were demonstrated to our investors and our backers, and the capital was to be allocated for the mass production and shipping of Plastc Cards to pre-order customers. At first, the principal investment group postponed their investment and a couple of weeks later the round fell apart.
After the initial funding was unavailable, Plastc made progress with another investor who offered $6.75 million. This deal was scheduled to close last week and would propel development across the finish line, as well as allow for Plastc Card pre-orders to be shipped and for production to continue into a retail phase.
However, once again at the very last minute, our investor gave us notice that they have decided rescind their investment offer. The round was a signature away from closing and we were extremely caught off guard when they notified us yesterday they were backing out. Our existing investors kept us alive and functioning as long as they could during this fundraising process, but in the end, we needed new outside capital to get into production.
What This Means For Backers:
It’s been a long road with a lot of obstacles. The support of our amazing backers has been incredible, which makes this announcement even harder. We were so incredibly ready for production in order to hit our deadlines but without capital it is impossible for us to move forward and we will not be able to fulfill any pre-orders.
We are disappointed and emotionally distraught, and while we know this is extremely disappointing for you, we want our backers to know that we did everything we could to make Plastc Card a reality.
- Plastc Inc.