Israeli start-up Gizmoz (formerly Zapa Digital Arts) closed in the course of the third quarter, according to a financial report by Leader Tech, an investment company in the Shrem-Fudim-Kelner group. Leader Tech had a 24.5% stake in the company. The founding group reported a $959,000 depreciation in the value of its investment in Gizmoz.
However, Eyal Gever, one of the company’s entrepreneurs, told “Globes” that Gizmoz had not shut down and that the company would announce a $1.5-2 million financing round in several weeks. Gever said, “Gizmoz is alive and kicking and it has customers.”
Gizmoz was founded in 1996 by a group of entrepreneurs headed by Arik Vardi, who also helped found Mirabilis (ICQ), which was later sold to AOL (America Online) for millions of dollars.
Gizmoz developed technology for viral Internet marketing. It developed tools called Gizmos, which enabled surfers to create electronic greeting cards and picture albums, to which voices, animation, and photographs could be added. Users were then able to send the cards and albums by e-mail. At its peak, the company had 65 employees at its development center in Tel Aviv.
The company is reported to have raised $25 million and was valued at $40 million in March 2000. Six months after this valuation, former Apple Computer (Nasdaq: AAPL) CEO John Sculley was appointed chairman. Gizmoz shareholders included the Sculley Brothers LLC fund, AOL, Chase Capital, Fujitsu, Pitango Venture Capital, Star Ventures Enterprises, and Giza Venture Capital.
Published by Israel's Business Arena on 13 December, 2001