Kawama.com Inc. says rumors of its death are more than exaggerated, they’re malicious, and it has warned a competitor to stop spreading them around.
Paul Drysch, Kawama.com’s chief sales and marketing officer, said a rival company, San Francisco-based Epylon Corp., has been circulating rumors about Kawama’s demise.
“Our lawyer has sent them a cease-and-desist-letter,” Drysch said.
Epylon founder Kelly Blanton said he’s never spoken to anyone about Kawama’s financial condition and said he doesn’t know how the Santa Ana firm is faring. “It’s a tough marketplace. They ought to focus on their product and not their competitors,” he said.
Kawama recently transformed itself from a site that offered information and products to students, teachers, parents and school administrators to one that focuses on procurement in the education arena. In the process, Kawama.com changed its name to KawamaCommerce.com.
The restructuring involved an unspecified number of layoffs.
“The success of our (business-to-business unit) has been so tremendous that we want to focus on where the commerce lies,” said Paul Drysch, Kawama’s chief sales and marketing officer.
He also was upbeat about the company’s health.
“We’re doing fine in terms of the money situation,” Drysch said. “”We’ve reorganized around the B2B space. We have an extremely competitive burn rate that’s a fraction of our competitors’.”
And in a recent company press release, Kawama boasted that it “expects to handle more than 40% of the almost $115 billion education procurement spending pie.”
That optimism may have been tested recently, however.
In early June, Kawama said it was about to close a second-round funding deal for $30 million. Kawama never announced receipt of that funding, and Drysch said only, “We did get the funding that we needed.”
While he wouldn’t elaborate on the second round, he did say the company soon will have major announcements about additions to its board.
“As you know, that usually means new funding,” he said.
Kawama early this year had 90 employees, but since has made some layoffs. Drysch declined to say how many the firm now employs.
Kawama also moved in June from its 3,000-square-foot office in Irvine to a 13,000-square-foot facility in Santa Ana, Drysch said.
KawamaCommerce.com was co-founded by Jeffrey Goh, Martin Eaton, Kurt Adams and Richard Kato. Goh, a former general manager for Frito-Lay China, is chief executive and chairman. Also on the board is Robert Gold, president and CEO of New Jersey-based Ridgewood Capital Management LLC. Ridgewood Capital was the lead investor in Kawama’s first round in March.
In May, the company hired former OfficeMax Executive VP Mark Race as president and COO. Race is still with KawamaCommerce.com.
The company recently changed its PR agency from the Irvine office of NCG Porter Novelli to New York-based Rubenstein Public Relations Inc. Drysch said the new agency will better position the company before the business financial community. n
