Zirtual, the San Francisco-based personal assistant startup, is back in business after abruptly shutting down operations Monday.
That announcement had left customers and about 400 employees in the lurch — We have no idea if we will get paid for the last week of work, if we still have health insurance, or if we even qualify for unemployment, one told TechCrunch.
In an emotional blog post Tuesday evening, Zirtual co-founder and CEO Maren Kate Donovan expressed her sorrow over the surprise shuttering: I cry for all the employees we hurt. I cry for all the clients we infuriated. And I cry for the investors we let down, she wrote.
Donovan said the company, which had raised $5 million over the past three years, simply burned through all its capital as costs skyrocketed after its move to convert workers from independent contractors to employees.
At the end of the day we grew faster than we could handle. Our burn spiraled out of control even with our high revenues, and that led to the pausing of Zirtual s services, she wrote.
But then, she wrote, a savior had been found at the 11th hour. Startups.co, an Ohio-based startup launch platform that was also a client, would purchase Zirtual, its assets and restart the company s operations next week.
Startups.co confirmed the purchase, and said some staff will be hired back, though it is unclear how many. In her blog post, Donovan said workers would be paid for their last week, and a FAQ on Zirtual s site asks customers to contact them to resume services.
Zirtual s roller-coaster ride is just the latest example of the difficulties facing the fast-growing on-demand economy. Last month, San Francisco on-demand cleaning service Homejoy closed after being hit with a lawsuit by contract workers. Similar lawsuits seeking employee status and benefits have targeted Uber, Lyft, Shyp, Washio, Postmates and Instacart.
Amid this backlash, a growing number of service-on-demand startups, such as Instacart, Sprig, Shyp and Eden, are reclassifying their workforces to employees. While such a move increases costs to the company, Sprig CEO
At top: Screengrab from Zirtual.com
