Phunware

Phunware Inc. is an American mobile software and blockchain company. It produces mobile applications for advertising and marketing purposes such as personalized ad targeting, location tracking, and cryptocurrency brand loyalty programs.

Phunware Inc.
TypePublic
IndustryMobile software
Blockchain
Founded2009 (2009)
FoundersAlan Knitowski
Luan Dang
HeadquartersAustin, Texas
Irvine, California
San Diego, California
Miami, Florida
Key people
Alan Knitowski (CEO)
Luan Dang (CTO)
Randall Crowder (COO)
Matt Aune (CFO)
ProductsPhunWare
PhunToken
Number of employees
50+
WebsitePhunWare.com
PhunToken.com

In 2020, Phunware was the fifth largest advertising technology company in politics, receiving criticism for its involvement with the Trump 2020 re-election campaign. In November of that year, it had more than 940 million monthly unique active devices and has 5 billion daily transactions, and had raised more than $120 million in capital since its founding.[1]

History

The company was founded as Phunware, Inc. in Austin, Texas, on March 25, 2009, by Alan Knitowski (CEO) and Luan Dang (CTO).

In 2014, as part of a $30 million expansion, Phunware acquired Digby Mobile Commerce, also based in Austin. The acquisition included Dibgy's subsidiary Movaya, based in Seattle and Chengdu, for an undisclosed sum.[2]

In 2017, the company acquired Odyssey, Simplikate, Digby, Tapit! ($23 million acquisition in 2017) and GoTV.

Their customers in 2019 included Fox Networks Group, HID Global, American Made Media Consultants, Presidio Networked Solutions, and MD Anderson.[3] Previous customers included Warner Brothers, NASCAR, NFL, and NBC Sports. Applications that send data to Phunware servers include the campus map for Cedars-Sinai Medical Center and GunDealio, an app for gun sales from Gun Talk Media.[4] Phunware's location tracking was used, for instance, to target 2018 Democratic ads at participants in the anti-Trump 2017 Women's March in DC.[4][5][6][7][8]

Phunware provided campaign data, including "users' daily digital trail", to the Trump reelection campaign, through a $3 million contract awarded by Brad Parscale's American Made Media Consultants. They also built the Trump–Pence reelection app for the campaign in November 2019.[4][5][9][7][10]

Phunware performed a reverse merger with Stellar Acquisitions III, a special-purpose acquisition company (or shell company) in December 2018, placing Phunware on the NASDAQ exchange.[1][11][12]

The company's non-GAAP adjusted net revenues were stated at $19 million in 2019, down from $22.5 million in 2018. The GAAP gross revenue was $19 million in 2019 and $30.8 million in 2018. Fox Networks Group was 50% of the company's 2019 sales, up from 42% the previous year. Phunware's active Fox contract was completed in 2019, meaning the sales could go to zero. The company had 93 employees at the end of 2019, after reducing their workforce by 44. In March 2020 the company furloughed 37 people.[3][13]

In 2020, Wikipedia co-founder Larry Sanger served on their advisory board.[14]

On April 10, 2020, Phunware received $6.1 million in federally backed small business loans from JP Morgan Chase as part of the Paycheck Protection Program. The company received scrutiny over this loan for its connections to Donald Trump and Fox News.[15][16] In defense, Crowder (COO) said companies that didn't apply "aren't doing their fiduciary duty", and said "Banks aren't loaning to unprofitable tech companies. There is no access to capital".[9][17]

On April 17, 2020, the company received a delisting notice from NASDAQ due to the stock trading below a dollar. However, the company's shares increased to above a dollar before the stock was delisted.[18][19]

On October 19, 2021, Phunware acquired computer system provider Lyte technology for $10.98 million to support their blockchain research and development efforts.[20]

Court cases

On September 26, 2017, Phunware sued Uber Technologies for $3 million in unpaid services, accusing the ride-sharing company of failing to pay its invoices, court records from The Superior Court of California show. In response, Uber filed suit against Phunware, alleging the software company committed fraud by, among other things, allowing ads for the ride-sharing app to show up on unauthorized third party sites. Former employees said the startup looked for "new ways to diversify its revenue stream."[21]

An October 9, 2020, SEC settlement shows that Phunware agreed to pay a total of $6 million—$4.5 million going to Uber—over claims of fraudulent advertising.[22]

References
  1. Garance Burke (17 November 2020). "Financially troubled startup helped power Trump campaign". Associated Press. Retrieved 17 November 2020.
  2. Hawkins, Lori (6 May 2014). "Austin software maker Phunware buys mobile developer Digby". Gannett. Retrieved 16 April 2022.
  3. "Prospectus Supplement No. 10". sec.gov. Retrieved 30 April 2020.
  4. Schechner, Sam; Glazer, Emily; Haggin, Patience (10 October 2019). "Political Campaigns Know Where You've Been. They're Tracking Your Phone". WSJ. Retrieved 30 April 2020.
  5. "Trump 2020 Location-Tracking Firm Cashing in on Coronavirus". The Intercept. 9 April 2020. Retrieved 30 April 2020.
  6. Sebastian Herrera (28 December 2020). "Austin's Phunware completes merger with Stellar Acquisition III". Austin American-Statesman. Retrieved 30 April 2020.
  7. "Phunware, a data firm for Trump campaign, got millions in coronavirus small business help". cbsnews.com. 23 April 2020. Retrieved 30 April 2020. Phunware was paid nearly $3 million in revenue from the Trump re-election campaign last year, or roughly 15% of its nearly $20 million in total sales, according to a filing with the SEC. In 2018, 66% of its $31 million revenue at the time came from work for client Fox Networks.
  8. Warzel, Charlie; Thompson, Stuart A. (22 December 2019). "Opinion | How Your Phone Betrays Democracy". The New York Times. Retrieved 30 April 2020. In company documents from 2017, Phunware, a Texas-based technology company, describes the race to collect location data to target voters as a "gold rush," suggesting that "as soon as the first few political campaigns realize the value of mobile ad targeting for voter engagement, the floodgates will open. Which campaigns will get there first and strike it rich?"
  9. "Full interview: Phunware COO discusses recent controversy as they push forward to protect company". Proactiveinvestors NA. 30 April 2020. Retrieved 30 April 2020.
  10. Egan, Matt; Business, CNN (24 April 2020). "JPMorgan, Ruth's Chris accused of cheating small businesses out of emergency loans". CNN. Retrieved 30 April 2020. {{cite web}}: |last2= has generic name (help)
  11. "Austin software firm Phunware plans to go public on Nasdaq after merger with Stellar Acquisitions - Austin Business Journal". Austin Business Journal. 28 February 2018. Retrieved 30 April 2020.
  12. "Behind the deal: The inside story on how Phunware's go-public merger got started - Austin Business Journal". Austin Business Journal. 24 May 2018. Retrieved 30 April 2020.
  13. "Phunware furloughs 37 because of coronavirus - Austin Business Journal". Austin Business Journal. 31 March 2020. Retrieved 30 April 2020.
  14. Choudhury, Uttara (2020-03-03). "Phunware appoints Wikipedia co-founder Larry Sanger to advisory board". Proactive investors. Retrieved 2021-01-19.
  15. Silver-Greenberg, Jessica; Enrich, David; Drucker, Jesse; Cowley, Stacy (26 April 2020). "Large, Troubled Companies Got Bailout Money in Small-Business Loan Program". The New York Times. Retrieved 28 April 2020.
  16. "FORM 8K". sec.gov. Retrieved 30 April 2020.
  17. "Texas Publicly Traded Companies Accept PPP Loans Meant for Small Businesses". spectrumlocalnews.com. Retrieved 30 April 2020.
  18. "FORM 8-K". sec.gov. Retrieved 30 April 2020.
  19. McEnery, Thornton. "Phunware's stock was up 1,000% on Friday. What in the world is Phunware?". MarketWatch. Retrieved 28 December 2021.
  20. "Phunware Closes Acquisition of High Performance Computer Provider Lyte Technology". Globe Newswire (Press release). 2021-10-19. Retrieved 2021-11-10.
  21. AP News (2020-11-17). "Financially troubled startup helped power Trump campaign". AP News. Retrieved 2021-12-08.
  22. Superior Court of California County of San Francisco (2020-10-09). "SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE". Securities and Exchange Commission. Retrieved 2021-12-08.
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