Modsy closes design services, removes roles and disrupts orders – TechCrunch

Modsy, an online interior design services company, has stopped offering design services, a move that comes at the expense of the team behind the effort and the customers who have flow orders.

In an email to TechCrunch, CEO of Modsy Shanna Tellerman provided this statement when asked about the business interruption:

We’ve worked hard for the past seven years to build Modsy and never expected to have to disrupt our business. Our focus has always been, and still is, our customers. We intend to fulfill customer merchandise orders and are working on a process for our design department customers. We ask for your patience as we develop this plan. I hope that for many people, Modsy’s story will not be defined by this turn of events, and we are truly sorry for that. We would like to thank our team, our designers and our customers.

TechCrunch sent a series of questions in response to the statement — including questions about the information below from sources — but has not yet received a response as of press time.

Late last week, sources said the company expected to be taken over, but the deal fell through, leaving the company’s designers jobless. The potential buyer is not known.

Employees later discovered that Modsy was pivoting to offer a SaaS platform, Modsy Pro, as a software service for interior designers. On Modsy’s website, Modsy Pro is described as “an online interior design software that will transform the way you do business…bring your client’s space to life with our proprietary room scanning technology, 3D renderings and to easily editable and purchasable designs”. The landing page offers users a way to request early access to the product that is still in beta.

Modsy’s initial business model revolved around selling interior design services on an AI-powered platform. Using the company’s apps, owners could create virtual renderings of their rooms and makeovers in real time. The company’s technology digitally replicated 360-degree rooms with furniture from well-known brands including West Elm, Crate & Barrel and Anthropologie. Users could purchase fixtures – whether it was a rug, sofa, or coffee table – either through Modsy directly or through partner tools such as Crate & Barrel’s 3D Room Designer.

Modsy asked customers to take photos and measurements of their pieces and take a style quiz outlining their preferences, budget and constraints. Modsy passed this information on to the designers, at which point customers got virtual design plans of their parts. Customers could then consult with the Modsy team or refine designs with a self-service tool.

The rollout of the new product comes as operations are disrupted elsewhere, both to the detriment of employees and customers. It also comes at a time of uncertainty.

Generally, Modsy’s communication has been inconsistent throughout the layoffs, customers – who spoke on the condition of anonymity – tell TechCrunch. A client had been in contact with a Modsy designer for about a week when the correspondence suddenly stopped. Then they received an email from the designer informing them of the pivot.

“I would like to personally offer my sincere apologies for this sudden business pivot,” the message read. “For the majority of us here at Modsy, today is our last day. However, this is a small team that has time left to help wrap things up with customers like you. We We are working hard to get everyone’s inquiries as quickly as possible, but please expect some delays in response time.It could take a few business days for someone to get back to you.

Furniture orders also appear to have been affected by personnel changes. A customer said TechCrunch items were in their cart on the evening of June 28, awaiting processing. A second customer, who had been working with a Modsy designer since early May, was told by customer support that the undo could not be processed and should try again later. When they tried to use Modsy’s app to cancel an order that wasn’t due to arrive until October, they saw a notification that all order processing had been halted.

The same customer received an email from Modsy’s support team promising to process all open orders, including pending orders. “We are currently experiencing delays in being able to process cancellations, but if you want to cancel something, let us know and we’ll put you in a queue,” wrote a support staff member.

A third client TechCrunch spoke to had started working with a Modsy designer on June 5. After several video calls, the client received a note from his designer saying he had been fired. When they tried to contact the designer for more information, they discovered that Modsy’s in-app chat feature had been disabled.

“I have not received any information from Modsy except for [a strange email from my designer] yesterday saying she was released,” one customer wrote in an email to Modsy customer service. “Our project hasn’t started yet, so I’m confused and frustrated with what’s going on. Sure, there are competitors, and I specifically picked Modsy – but we’re moving into a new house, and I have a sensitive schedule that probably won’t be met anymore.

Today, some Modsy customers reported that they started seeing a prompt in the mobile app asking them to “upgrade” to the latest version. But no updates were available through the App Store, which made the app effectively non-functional.

Modsy support directed customers requesting a refund to a Google form. Several customers were told that refunds would take one to two weeks.

Modsy’s backers included Comcast Ventures, Norwest Venture Partners and NBCUniversal. The company’s last funding round closed in May 2019, bringing Modsy’s total reached $72.7 million, according to data from Crunchbase. Modsy has explored a number of potential new business areas throughout its history. At one point, the company even developed and sold its own line of furniture, Minna Home, which covered several different styles of sofas and chairs.

The company experienced a series of layoffs at the start of the pandemic, cutting a good portion of employees and contractors and reducing executive salaries. At the time, Tellerman attributed the downsizing to “an effort to maintain a sustainable business in these unprecedented circumstances.” The April 2020 layoff also saw designers lose their jobs.

Modsy has taken a hit on the logistics side during the pandemic as global supply chains have come to a halt. Amanda Kwan-Rosenbush, senior manager of finance and accounting at Modsy, previously described shipping as a “significant cost” and said Modsy’s furniture and décor partners were dealing with lengthy delays.

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