Marissa Mayer is shutting down her AI startup Sunshine after seven rocky years and transferring its assets to Dazzle, a new AI company she recently incorporated. The move signals Mayer’s pivot toward developing a new kind of AI personal assistant, with 99% of shareholders approving the acquisition deal as of late September.
What you should know: Sunshine, originally called Lumi Labs, struggled to gain traction despite raising $20 million in venture funding plus Mayer’s personal investment since its 2018 founding.
- The startup’s roughly 15 employees are expected to transition to new roles at Dazzle, according to sources close to the situation.
- Mayer serves as Sunshine’s largest shareholder and investor, making the acquisition decision largely within her control.
The big picture: This marks another chapter in Mayer’s post-Yahoo career as she attempts to find her footing in the AI landscape after her high-profile tenure leading the struggling internet giant from 2012 to 2017.
- Before Yahoo, Mayer was Google employee number 20, where she designed the interface for Google Search and helped develop Google Maps and Google AdWords.
- Her Silicon Valley network proved instrumental in launching Sunshine, with the idea for the first product stemming from her own experience managing extensive industry contacts.
Product struggles: Sunshine’s consumer-facing apps failed to resonate with users and faced significant criticism.
- Sunshine Contacts, launched in 2020, used AI to identify and merge duplicate contacts but drew complaints about privacy violations after automatically pulling home addresses from Whitepages, a public directory service.
- The company’s 2024 photo sharing app called Shine was “widely viewed as a flop,” according to the report.
What they’re saying: Mayer emphasized continuity despite the company transition in her statement to shareholders.
- “After careful consideration, Sunshine’s management, and 99.99% of its shareholders, determined the strongest path forward for the company was to sell to Dazzle AI, a new company already incorporated and with committed funding,” Mayer said through a spokesperson.
- “As Sunshine’s largest investor, shareholder, and CEO, Marissa is proud of what the team built and looks forward to carrying that momentum into new opportunities around Dazzle.”
Who else is involved: The shareholder approval process included several notable Silicon Valley investors and firms.
- Key stakeholders include Sunshine cofounder Enrique Muñoz Torres, Norwest Venture Partners, Felicis Partners, Ron Conway’s SV Angel, and PR firm Archetype Agency.
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