Modsy stopped offering design services in June, laid off its designers and left customers with unfinished renovations and project orders. Service order charges were returned and promised refunds to those who completed a form. Many Modsy customers are still waiting for updates.
It has become more difficult to get in touch with them. Modsy recently deleted its social media accounts and made them private.
The founder and CEO of Modsy said in an email that the business closed in July. Business of Home reported in June that leadership intended to wind down the corporate and legal entity of Modsy and that most of the company's employees had been let go. At the time, Tellerman wouldn't confirm this.
The company ceased operations on July 6 due to capital constraints and uncertainty in the market. The assets of Modsy were acquired by a new entity and some former employees were hired to take the business in a new direction.
Next steps on how to address customers' needs will be communicated to them.
A general assignment for the benefit of creditor is what the entity is called. There is a nod to Modsy's legal name, "Pencil andPixel, Inc." In this case, Modsy entered into an agreement to assign its assets to a third party for the purpose of liquidating the business. In the tech industry, it is a proven strategy. The ABC route was used by the manufacturer of the e-ink smartwatch. In 2015, On Live formed an ABC to sell its technology to Sony.
ABCs can allow assets to be quickly sold, either for cash or to pay off their debts, in order to keep services running. The equity of the original company is wiped out. The stock options of a former Modsy employee are no longer worth anything.
There is a link in the email that leads to a form for claims outside of funds. It's not clear which claims, if any, will be successful in the process of recovering money and benefits.
According to a former employee, a homebuilder in Fontainebleau, Florida may be funding Pencil. It is true that Lennar was a major partner of Modsy's. In May 2021, the companies announced a collaboration to create "walkable" 3D tours of model homes. Modsy is a portfolio company of the corporate venture arm of Lennar.
The post says that they are helping the customers imagine their future homes. Customers can visualize what their future home will look like before it's built, work with a designer to personalize the interior design to their needs and style, and purchase furniture and decor for their new home with ease.
The shell of the former Modsy team is still trying to figure out a path forward, and several customers say that they have been stonewalled by the support team. All of the customers who applied for refunds in June didn't hear from the company or get any information about their refunds. One person said that they would get a refund within a few days. They weren't told when to expect a refund after they were approved for one.
One customer said he had $50,000 in in-process orders that were in limbo. Modsy has said that they will be fulfilling remaining outstanding orders for furniture, but there's not much in the way of logistical support.
One of the perks of Modsy was to facilitate returns. That is not occurring. We have at least $4,500 in undelivered or unanswered return requests.
Modsy sold interior design services on top of an artificial intelligence platform. Prior to founding the company, Tellerman was a partner at a venture capital firm.
Property owners can use Modsy's apps to create mock ups of their rooms or pay a designer for a custom layout. Either Modsy or partner tools could be used to purchase the fixture.
TCV was one of the backers of Modsy. The last funding round for Modsy ended in May of 2019.
Modsy Pro, a software-as-a-service platform, will be offered as a service for interior designers. Modsy Pro is described on the website as an online interior design software that will transform the way you do business.
Two years after Modsy made a series of aggressive cuts, the company moved. Tellerman told Business of Home that it was part of an effort to make the companyleaner. Modsy, in addition to piloting its own furniture line, at one point tried outsourcing design work to the Philippines and Bulgaria as a way to reduce operating expenses.
There is a way for users to apply for early access to the product. The launch seems to be up in the air due to Modsy shutting down.
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