Siren, a feminist online dating app, is shutting down today. In a blog post announcing the news earlier this week, Siren co-founder Susie Lee cited financial difficulties for the closure and lamented the lack of support for women in tech.
Now, in an interview with The Stranger, Lee and co-founder Katrina Hess break down the complicated history behind the end of their startup.
In short, Siren’s lead investor never fulfilled its financial commitment to the company.
In March 2016, Half the World Holdings (HWH), an investment branch of Singapore-based Blackrun Ventures with a mission of investing in women-centered companies, committed to investing $225,000 in Siren as part of a $750,000 seed round.
But the money trickled in in small, unpredictable amounts, Hess and Lee said, and they never received the full amount.
“It was a constant weight around our necks,” Lee said. “It was like a toxic relationship.”
To Lee and Hess, their experience with HWH is part of a larger story about the lack of support for women-led tech companies. Lee said that “the extra twist of the blade” was that HWH came to them with a mission of helping female founders and then “completely [did] the opposite.”
“It was really damaging,” she said.
This problem extends to the heart of the tech world in Silicon Valley, the two women said.
“The surprising thing was there were so many investors who wanted to support women and women of color,” Hess said. “But when we reached out to them, it was like they never said that. There was definitely a PR-play for companies to be on the right side of this.”
Siren didn’t receive their first disbursement of investment money from HWH, about $50,000, until mid-June 2016, three months after they signed on as a lead investor.
Typically, said Lee, after closing documents are signed by the investor, funds are deposited into the investee’s accounts within a couple days. HWH representatives cited administrative difficulties setting up bank accounts in Asia, which was understandable, Hess said.
“At the time, we were always under the impression that they had the money in their account,” she said. “We kept getting assured the rest of the money would come. ... It was very odd because they sounded so sincere and earnest about it.”
The delay raised concerns among Siren’s other investors and the company’s legal advisors, whom Hess said told her that they’d never seen a situation like this before. Hess said one company adviser left Siren “because they didn’t want to be associated with this investor.”
Since HWH first signed legal documents obligating them to their investment in March 2016, Siren received five checks from the firm. In July and August, Siren received disbursements totaling about $75,000. Then they received two more checks, disbursed in October 2016 and this past March, totaling $40,000, the founders said.
Lee and Hess claim they are still owed about $60,000. They said that HWH representatives kept reassuring the Siren team that the money was coming “tomorrow” or “next week.”
During a Skype meeting with HWH representatives and Blackrun Ventures co-chairman Mark Pawley in August, Hess asked whether the company had the money to fulfill their investment obligation.
“They said ‘no,’” Hess said.
When Siren's founders announced to HWH that they would close on March 30, representatives from the firm allegedly told Lee they would be wiring the final round of cash next week. "It was always next week," Lee added.
“I understand that in investor relations...people can ghost and things can change,” Lee said. “This is all stuff we can totally understand and handle. What was really damaging about this was that we had gone through all of that. They had signed documents legally obligating them to finish this round. They kept reassuring us and never disappeared to the point where we could say our lead investor was no longer there.”
She continued: “This not only affected Katrina’s and [my] trajectory to grow the company, but it put all the other investors at risk. By [HWH] failing to be the lead, essentially, everyone’s money went down the drain.”
“It would’ve been more clear if they decided to completely back away or that they don’t want to invest in us, some very direct honest statement,” Hess said. “That’s the most maddening part about it.”
The company and founders are not interested in pursuing legal action because it's not in the company's best interest, Lee and Hess said.
In a statement, Blackrun Ventures representatives wrote that the $165,000 paid to Siren "was disbursed over the last 12 months following the completion of due diligence."
We were committed to providing the remainder of the investment to support Siren’s expansion, and sent our consultant to work with the team on their strategic direction. Unfortunately, the founders made a decision on April 4th to close down the company.
The dating app market is crowded and highly competitive, but our reasons for investing in Siren were strategic, and we were won over by the vision and passion of the company’s founders. Nevertheless, while we still see potential for the business, particularly internationally, we respect their decision.
This post has been updated to include a statement from representatives for Blackrun Ventures, the parent firm for Half the World Holdings, the lead investor for Siren.