Business Insider

After laying off employees at one Israeli start-up, founder immediately launches US$14,000 smartphone at another

Mobli cuts 15 employees as CEO Moshe Hogeg shifts his focus on Sirin Labs' smartphone launch in the same week

PUBLISHED : Wednesday, 01 June, 2016, 8:40pm
UPDATED : Thursday, 02 June, 2016, 12:16pm

People in Israel's tight-knit start-up community are talking about the reported death, and the odd life, of once high-flying start-up Mobli.

Mobli raised US$86 million in venture funds in six years, some from some big names.

Mobli's layoffs were first reported by Israeli business Calcalist and confirmed by Business Insider.

Mobli's CEO, Moshe Hogeg, said the company has cut 15 employees this week and is closing its Israeli R&D centre.

Sources say this represents all of Mobli's remaining Israeli employees, although Hogeg insists that the company is not being closed down entirely. He says that he's retaining an R&D team in Europe.

At its height, Mobli employed about 50 people, but now only a handful remain, according to sources.

In Israel, the shock isn't so much that Mobli is struggling — people don't understand how the company has stayed alive as long as it has. It jumped from one failed product to the next.

How is this company still alive?

Mobli sprang to life in 2010 as a photo-sharing social-media site backed by star angel investors like Lance Armstrong, Serena Williams, and Tobey Maguire. It later landed US$60 million from Mexican billionaire Carlos Slim, it said, for a total of US$86 million raised.

For instance, Armstrong used Mobli to share that famous photo of himself with his Tour de France jerseys after he was banned for life by the International Cycling Union for doping.

But then Instagram came along and Facebook bought it, and that pretty much killed Mobli as a photo-sharing social network.

The company pivoted to other apps. For instance, in 2015 it launched an app called EyeIn, a photo service for publishers that let them find pictures of events shared on social-media sites.

It shut EyeIn down just two months after it was launched when Instagram blocked the app from using Instagram photos.

"We had to shut down EyeIn two months after launch because Facebook/Instagram blocked us from their API, rendering our technology useless," Hogeg confirmed.

See ya later, Slant?

Mobli then moved on to Slant, a news site based in New York for freelance articles. Writers got professional editing and Slant took a 30 per cent cut of any advertising revenue their articles generated. Slant hit 4 million readers in a month and published 9,000 stories from 1,400 writers, but its editor, Amanda Gutterman, announced in her farewell letter in April that Slant was being shut down, as reported by Politico.

A former employee told us that much of this traffic was generated through paid-ad campaigns by services like Outbrain.

Slant later told Politico that it was not closed for good but will be back once the company figures out a new business model. Meanwhile, Gutterman has moved on to a new job at The Dose and the site is not functioning.

Mobli now has a new thing, a new social-network app called Galaxia that launched in March, where people are encouraged to take on different "personas."

Mobli says that Galaxia's tech came from a start-up it acquired called Pheed. The rumor was that it paid US$40 million in cash for Pheed, but Hogeg tells us that the true price was really "just a few million."

The people we talked to have marveled that Mobli says that it is still in business and can't understand how.

Hogeg says that Mobli has been clear where its money has come from: venture investors.

"We've always been very transparent about our funding. Amongst are investors: Carlos Slim, Leo DiCaprio, and Kenges Rakishev and all that info is readily available. We raised sufficient funds to allow us to stay in business thus far," he says.

Mobli was also famous for being one of the first start-ups to use NASDAQ's private market, allowing early employees to cash out their shares in the company by selling them to other private investors.

A $14,000 phone

In the meantime, Moshe Hogeg is focused on a new company, Sirin Labs, where he is president, investor, and cofounder, but not CEO. The CEO is Tal Cohen.

Right after letting staff go at Mobli, Sirin launched its product on Tuesday in London, UK: a smartphone for about US$14,000, or 9,500 pounds.

The phone is aimed at wealthy people who want a fast and stylish phone that also encrypts all their data.

Sirin says that it raised US$72 million in funding and has 85 employees based in Switzerland, Sweden, England, and Israel.

NOW WATCH: This smartphone works by bending it

See Also:

SEE ALSO: Larry Ellison explains why life isn't about money: 'At some point, you can't spend all of it. Trust me, I've tried'