The Long Story Behind Gigaom’s Sudden Demise

When Gigaom’s managers announced the tech news publisher was laying off all of its employees, the news came as a shock to the site’s staff and its many admirers. But, behind the scenes, Gigaom’s managers and investors had known the company was in serious peril for more than two months. And while they hadn’t discussed it publicly, its backers had been trying to fix the company for at least a year by pouring millions more into the publisher and swapping out executives.

None of that was enough. After failing to sell the company, Gigaom’s investors decided they would stop funding it. But first they needed to make one last investment — a seven-figure check to cover the costs of employees’ severance payouts. They’re still hoping to find a buyer. It’s still unclear exactly how Gigaom went from one of the Web’s pioneering tech blogs to a zombie site without a staff. But the state of the company’s finances over the last couple years is clear: They were a mess. Over the course of eight years, Gigaom, founded by prominent technology journalist Om Malik, had raised around $40 million in equity and debt. Sources said that about $5 million of that came from a 2011 venture debt round led by Western Technology Investment, and in 2014 the company had raised yet more money to help pay that debt down. But, by the end of 2014, Gigaom still had significant debt to service — people familiar with the company said it was spending around $400,000 a month on rent and interest payments.