When someone supports a crowdfunding project, they aren’t looking at it as a risky investment. They see it as getting in on the ground floor with a hopefully innovative new product. That product might sell out before they can get their hands on it. Unfortunately, thousands of crowdfunding backers are totally screwed out of millions of dollars, as crowdfunded innovator Plastc has declared bankruptcy.
The Rise of Plastc, the ‘Supercard’
Plastc promised to be “the only banking card that you’ll need.” It aimed to compete with Apple Pay, storing all of your credit, debit, loyalty, access, and gift cards into a single chunk of plastic. It was going to feature an E-Ink display that would show your name and the selected card and its barcode. It would also support NFC as well as chip and PIN technology.
Unlike rivals like Apple Pay, Plastc would be supported everywhere, since it would support both swiping the card and inserting it into chip card readers. Plastc would also work with touchless pay terminals, like Apple Pay works today. Getting in on the product cost $155, and 80,000 people preordered the device. Plastc was supposed to launch in the summer of 2015 – and now we’re more than a quarter of the way through 2017.
The ‘Supercard’ Met Its Kryptonite – Skittish Investors
Plastc expected to close a $3.5 million Series A funding round on Feb. 28, 2017, but that never happened. Another investor offered $6.75 million and was supposed to close by April 14, 2017, but that fell through as well. Plastc needed outside capital to begin producing its products, and didn’t have it. As a result, Plastc ceased all operations as of April 20, 2017, and is exploring options for Chapter 7 bankruptcy.
Glad I Didn’t Get Caught, but I’m Still Steamed
I almost bought into the idea of a “supercard” like Coin or Plastc, but today I’m really glad I didn’t. There are already plenty of ways to pay for things, and I carry around a wallet bulging with loyalty, gift, access, and credit and debit cards. Not to mention coupons. I’m a coupon fanatic. The idea of being able to carry all of those forms of payment in one credit card-sized device really appealed to me, but I never pulled the trigger.
I’m glad I didn’t. I watched the project keep getting delayed, and ultimately decided not to take the risk. Instead, I went all-in with Apple Pay, not streamlining my wallet as much as I’d like but still simplifying my life. Anyways, I digress.
It Might Be Legal, but It’s Still Wrong
Plastc should never have put so much reliance into investors outside of the people who were backing the project, in my opinion. I get that innovation requires funding, but some sort of safeguard should have been put into place to protect the people who were putting their hard-earned dollars behind Plastc. Even worse, the company’s “response” to its difficulties is nothing short of a travesty.
We are disappointed and emotionally distraught, and while we know this is extremely disappointing for you, we want our backers to know that we did everything we could to make Plastc Card a reality.- Plastc Inc
Rather than being up front and honest about the fact that Plastc’s chances of success, the company acted as if everything was on its ever-changing schedule. When it all fell apart, Plastc screwed 80,000 people out of more than $9 million. Their “apology?” An explanation of what went wrong with the investors, and a claim of being “emotionally distraught.”
Emotionally distraught? You took millions of dollars and disappeared without producing and delivering a single product to your customers, and you’re emotionally distraught? Well, you realy should be, but the analytical tone of most of your shutdown notice make it seem more nonchalant and matter-of-fact. It almost comes across as casual, like “Oh well, we tried and it didn’t work. Such is life.”
It’s one thing for investors to take a loss, since that’s part of the game. These people weren’t investors expecting a profit on their money. These folks were customers expecting a product. They were putting down their hard-earned money to buy something, not investing for future gain. Instead, they get a brief acknowledgement that the people who stole their money are “emotionally distraught.” I’m sure that does plenty to assuage their disgust and disappointment with a product that should have been a no-brainer, and instead fell apart like Humpty Dumpty when he fell off the wall.