The company, which was backed by IBM, AT&T, Intel and also funded by 3i and Apax Partners, failed to attract enough funding to continue with its plans in the face of increased competition, according to Cometa.
VP of marketing Kent Hellebust told ComputerWire: We were looking for additional capital to fund our national expansion plans, and the return on investment from an investor’s perspective was not adequate.
The business plan always called for additional funding, he said, but the increased competition in the market made investing in Cometa seem a lot riskier than when the company formed in December 2002.
Forty people will lose their jobs as a result of the closure, Hellebust said, mostly at the company’s headquarters in Seattle.
As far as customers go, Cometa is exploring alternatives, he said. The company had limited success with its rollout. The hotspots, which number in the low hundreds, are primarily in Seattle, due to a deal with Tully’s coffee shops.
The company had also recently won a deal to put hotspots in Barnes & Noble bookstores, but lost out on a significant deal, after a trial in New York, to put its access points in 5,000 McDonalds fast food restaurants in the US.
Cometa was due to absorb Toshiba’s SurfHere network into its own, after Toshiba decided to exit the market last month. WayPort Inc, which won the McDonalds deal, may be a likely candidate to now take on SurfHere, and maybe even Cometa.
