StumbleUpon lays off dozens after failing to raise new round, source says

Content discovery company StumbleUpon was unable to secure additional venture capital funding and is now letting go of dozens of employees in a new round of layoffs, VentureBeat has learned.

The company had just under 100 employees and will only have around 30 by the end of this week, a source familiar with the matter told VentureBeat. Last week employees were told in individual meetings that they would be laid off, and now those employees are finishing up their work, the source said, adding that the company is preserving people in engineering and sales roles.

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“It’s been tough for StumbleUpon to compete,” the source told VentureBeat. “It predates a lot of the social networks. It certainly had its heyday when they had their largest user base.” In 2012 the company had 25 million users. Layoffs — in which 35 out of 110 employees were let go — came in early 2013.

Based in New York and San Francisco, the company last disclosed a funding round — $17 million — in 2011.

StumbleUpon started in 2002, got acquired by eBay for $75 million in 2007, and spun out of eBay two years later. For years, news outlets would occasionally find themselves getting swarmed with web traffic when an article was submitted to StumbleUpon, a site which allows Web surfers to come across websites relating to their interests. Advertisers pay to have their content natively placed on websites that get stumbled upon by their target audiences. News sites get page views.

StumbleUpon claims that 120,000 brands and publishers, including HBO, Levi’s, and Nike, use its advertising system.

But Facebook, Twitter, and YouTube, among others, have become popular avenues for advertising, especially as mobile advertising has taken hold. StumbleUpon offers mobile apps, but news discovery apps such as Flipboard have gained traction in the past few years. StumbleUpon, meanwhile, has not reported new user numbers since 2012. Data from App Annie about the download rate of StumbleUpon’s iOS app does not bode well.

We’ve reached out to StumbleUpon for comment on the matter. We’ll update this story when we hear back.