Wesabe Inc. has lost its spice.
Having long eschewed the revenue-generating strategies of many of its rivals, the San Francisco provider of personal financial management technology is now winding down its operations.
Wesabe frequently said that offering advertisements or collecting referral fees, key to the business models of its rivals, would undermine its efforts to build trust with its users.
And while observers said its dedication to its principles was admirable, this left the company without a viable source of revenue.
"Part of the plan was 'we don't advertise,' but you can't necessarily survive on that," said Nicole Sturgill, the research director for delivery channels at the research firm TowerGroup. "I'm not sure what they were surviving on."
Wesabe announced on its website Wednesday that it was shuttering its free online PFM service. It is also closing down the unit that sold PFM applications to banks and the dedicated website it had created to support its financial company customers.
The only part of the company that will remain is its online discussion board — because one of its users has agreed to fund it.
Wesabe went live in 2005, initially offering only the free online service for consumers, and for years was cagey about explaining its revenue model.
Last year it finally announced a business model that included a revenue component: selling its software to banks and credit unions.
Even then the company bucked standard practice in the banking technology market by posting its prices online and allowing banks to sign up without dealing with a sales rep.
That business was slow to take off.
"It hasn't helped as much as I had hoped," Marc Hedlund, Wesabe's co-founder and chief executive, said in a May interview. He did not return calls this week requesting comment.
"I don't think that the banking world is as ready to do that sort of thing as I would have hoped they would be," he said.
After rejecting one revenue stream and falling short of its expectations with another, Wesabe came to the point where it could no longer afford to run its service.
"In recent months Wesabe has been operating on a shoestring budget," Hedlund wrote in a message posted online Wednesday.
"We have not been able to provide the support people need to use" the website "for something so central as financial management. … That's obviously a bad experience, and not what we want to offer," he wrote.
The consumer PFM service will go down at the end of July, and Wesabe said it plans to delete all user data at that time. (The one-month window will allow current users to download their transaction data.)
The company also said it would publish the source code for its system, so that users with coding experience can continue to keep the software running for their own accounts.
Though Hedlund's letter only addressed the consumer-focused portions of Wesabe's operations, Delta Community Credit Union confirmed that the bank-focused business would also be shut down.
Delta agreed last year to offer its members the Wesabe software but it has not yet introduced the service, and Bill Mesplay, Delta's chief information officer said Thursday that Wesabe is no longer providing PFM software to financial companies.
On its online forum, some users offered to pay for Wesabe's service, but Hedlund said that charging such a fee would not provide enough revenue.
