Attention, athlete investors and accolades might not be enough to keep VICIS afloat.
According to the New York Times, the Seattle-based helmet manufacturer, which began in 2013, told its investors late last month that it was running out of money.
VICIS brands itself as a technology company, not a sporting goods company, and aims to create the safest helmets possible.
It got some big-name players to invest money in its idea: Aaron Rodgers, Russell Wilson, Doug Baldwin and Alex Smith are among those who have invested in the venture. The NFL also gave the company $1.1 million in grants, though the league does not have a stake in the company.
And on paper, it’s paid off: founded by two University of Washington professors and a veteran of the medical device business, VICIS helmets have shock absorbers that have been shown to reduce the impact of direct hits and limit the rotational energy absorbed by the skull.
In 2019, VICIS’s 2018 Zero1 model was found to be the safest used by NFL players (the Schutt F7 LTD was close behind); in 2018, the 2018 and 2017 Zero1 models were found to be safest in laboratory testing backed by the NFL and NFL Players Association.
In November, Time magazine named the VICIS Zero1 Youth as one of the 100 best inventions of 2019.
But around Thanksgiving, investors received a letter officially telling them the company is running out of cash.
“Our employees are currently furloughed and we need to raise capital in order to continue operating, or we may have no other option but to wind down all operations,” it read. The letter was signed by Ralph Greene Jr. who had taken over as CEO days earlier.
VICIS has reportedly raised more than $90 million from investors and venture capitalists.
The NYT wrote that VICIS expects to lose $26 million this year. To try to keep the doors open, it plans to cut operating costs in half and will try to raise additional money by selling shares — however, the shares value the company at just $5 million; it was valued at $90 million as recently as last year. It will also focus on just two helmet models: one for adults and one for children.
A company spokesman acknowledged that VICIS is seeking another round of funding but would not comment further.
Dave Marver, the co-founder with medical device experience who was also VICIS’ CEO, was forced out by the company’s board. He said raising money was a time-consuming process.
“We were more successful than most at raising capital, but it took a tremendous amount of time and effort, effort that could have been applied to growing and running the business,” Marver told the NYT.
Another problem: technology is expensive. VICIS helmets can cost up to $1500, at least double what other top-end helmets cost. The company hoped that having high-profile users would help its growth. (Rodgers, though one of the investors through the Rx3 Ventures fund he’s a partner in, does not wear a VICIS helmet.)
It’s not clear what the future holds — the company’s homepage says, “VICIS will be conducting internal year-end activities through January 2, 2020. We will resume accepting orders at that time” — but the company is getting credit for its achievements.
“They should be proud of the work they have done,” NFL vice president for health and safety innovation Jeff Miller said in a statement. “It has contributed to a significant shift in the helmet manufacturing industry that benefits players at the professional level and beyond.”
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