Off & Away, a hotel auction site start-up based in Seattle, terminated doing business and its assets were sold to a social commerce site with no travel product.
Launched in June 2010 to much buzz and backed by Madrona Venture Group to the tune of $1.35 million initially, Off & Away posted a notice on its website that it is "closing its doors" and has been purchased by Lockerz, which is also based in Seattle and runs a retail site with social aspects.
Eleven of Off & Away's 12 employees, including co-founders Doug Aley and Michael Walton, are transitioning to Lockerz, which purchased Off & Away's core assets, but has no immediate plans to enter the travel sector. Aley is now chief of member experience at Lockerz and Walton is chief product officer.
Terms of the deal were not detailed, although Lockerz revealed in a financial filing December 6 that it completed a $4 million stock offering in connection with a "business combination transaction."
The auction model, where users buy bids to secure a hotel or other deal, has taken its lumps of late with companies, such as Swoopo, BigDeal and now Off & Away, ceasing operations.
Retaining customers and getting scale have been the big problem with at least some of these businesses.
Off & Away seemed to have solved some of the retention issues by enabling unsuccessful bidders to book hotels on a retail basis, but that cut into the company's margins, and scaling the business was slow and problematical.
Although Lockerz has no immediate plans to get into the travel business, Off & Away says that all bookings for future travel will be honored and that refunds are in the works for unused portions of purchased Bid Packs.
"Thanks to our amazing hotel partners who were open to trying something new and innovative and for helping us understand how we could better provide value to you," the Off & Away team says on its website.
"Thanks to our customers. You all rock. Keep dreaming and keep traveling."
Off & Away had been featured in a TLabs Showcase in June 2010.