Exclusive: CircleBack Cuts Jobs as it Returns To Consumer Roots

November 23, 2015, 8:12 PM UTC
(AUSTRALIA & NEW ZEALAND OUT) An old fashioned rolodex, 7 June 2005. SMH Picture by QUENTIN JONES (Photo by Fairfax Media/Fairfax Media via Getty Images)
The Sydney Morning Herald Fairfax Media via Getty Images

CircleBack, a startup focused on keeping your contacts and associated data updated, has cut 19 jobs and is ending a strategy started this summer to appeal to business customers.

Founder and CEO Manoj Ramnani confirmed the news to Fortune, saying the company was returning to its original mission of ensuring consumers that their personal business contact lists are accurate.

In July, CircleBack, which according to a former employee had about 40 employees until the recent layoffs, announced a $12 million funding round led by TDF Ventures, with additional participation by Grotech Ventures, Syncom Venture Partners, and CNF Investments.

Ramnani said the decision to jettison the push into corporations, which involved CircleBack selling versions of its software for Salesforce.com (CRM) and other big customer relationship management vendors, was made jointly by management and the new investors.

“We thought we’d be able to serve businesses also so we started the business part of the product in the third quarter and ran it for one quarter. It turned out that for a small company, our resources were better used for the consumer part of the business,” he said. Ramnani confirmed the layoffs but also said the company is hiring engineers and others for its core business.

This news is an example of how a startup got distracted by moving beyond its roots. A friend who uses CircleBack for his personal contacts is a fan. He said that you provide your contact data, and CircleBack checks it against its database that is crowdsourced from other customers. It then spits back updated information for your contacts (excluding cell phone numbers or other personal information.) Given how quickly people change jobs these days, it’s quite helpful, he said.

It is also probably worth pointing out that the marketing automation arena, where Salesforce, Adobe Systems (ADBE), Oracle (ORCL), and IBM (IBM) have spent billions buying companies, is a hyper-active environment. The contact management niche in particular has also seen acquisitions—Salesforce bought Jigsaw in 2010 for $142 million, and rebranded that business as Data.com.

That consolidation may mean that smaller companies have a tougher time getting noticed, even if they offer superior technology. Other, still independent competitors in the contact management market include Plaxo and Evercontact.

For more from Barb, follow her on Twitter @gigabarb. Read her Fortune coverage at fortune.com/barb-darrow or subscribe via RSS feed.

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