Mode Media is no more. Once considered one of the most successful pure-play digital publishers, earning a $1 billion valuation, the content creation and advertising network announced Thursday that it will cease operations immediately, laying off hundreds of employees and leaving thousands of freelancers unpaid.
Founded in 2004, it began life as Glam Media, named for its flagship female lifestyle site, Glam. It pioneered the occasionally lucrative business of audience extension through its ad network, which allowed it to aggregate audiences from multiple publishers (including sites not its own) to offer advertisers massive scale, reaching 137 million unique visitors per month, per comScore.
In August 2013, the company received an investment that valued it at around $1 billion, earning it a spot in the pantheon of “unicorns” — companies with $1 billion valuations that are still privately held. Mode apparently considered going public later that year, but the stock-market debut never happened.
Altogether, its various rounds of private funding came to $230 million, including an investment in January 2015 by Hubert Burda Media, a German company.
However, clouds first appeared on the horizon back in April, when its founding CEO Samir Arora left the company’s board of directors, along with Internet investor Marc Andreessen, who joined Mode after its acquisition of social network Ning back in 2011.
The company also laid off some employees and launched a restructuring, which was supposed to put it on a more secure footing going forward.
According to an internal memo circulated to Mode’s employees on Thursday, the company has been seeking new investors or buyers for a potential acquisition, but the search turned up empty-handed.
In an unusual step for a company winding down operations, with all its concomitant financial liabilities, Mode executives admitted in a memo that they kept the company’s woes secret from employees over the last few months. They believed letting them know might damage their chances of finding a buyer or lining up new financing.
As reports of Mode’s closing spread Thursday and Friday, it also became clear that many contractors have been left unpaid, including thousands of members of Mode’s 12,000-strong network of independent content creators. Some took to social media to complain of arrears reaching five figures.