Mode Media screws its employees on the way out

Silicon Valley is in shock today as folks wake up to find Mode Media, once one of digital media’s highest-flying unicorns, is dead.

The ad network, formerly known as Glam Media, abruptly shut down on Thursday after burning through $225 million in investor cash.

The bad news fell particularly hard on Mode’s 300-person workforce. Not only are they out of a job, but Mode is offering them no severance pay and health coverage only through Sept. 30 — with no option for Cobra.

For continued health care, the now-unemployed workers should apply for ObamaCare, the company said in an unsigned memo, a copy of which was obtained by The Post.

The company apologized to its employees for the sudden shutdown, saying it wished it could have “provided you with greater notice.”

But those words did little to mollify the situation, fitting an enraged staff as comfortably as a four-finger glove.

Employees were so ticked off that apparently one or more hacked into the Wikipedia page of co-founder and former CEO Samir Arora and took out their frustration by rewriting his bio.

“Samir Arora (born November 5, 1965) is an abysmal failure as a businessman and former CEO of Mode Media…,” the hacked page announced Thursday night. “I think it is safe to say he will never work in Silicon Valley Again.”

On Friday morning, Arora’s Wiki page was back to normal.

The same can’t be said of Mode’s employees.

At one point, Mode Media, founded in 2003, had a valuation of close to $1 billion — the cutoff for companies referred to in Silicon Valley as “unicorns.”

Investors around the world rushed to be a part of the new digital ad agency.

Hubert Burda Media, a German media giant, had emerged as the primary backer of the past 15 months after pumping in $45 million, but turned off the cash spigot — refusing to pump any more money into the cash-burning Mode, sources said.

Early investors included blue-chip Silicon Valley venture capital firms like Tim Draper’s Draper Fisher Jurvetson and Accel Parnters.

Silicon Valley Bank is also apparently on the hook for tens of millions in loans. Marc Andreessen joined the board in 2011 when Mode acquired his Ning social networking platform for $150 million. But he resigned from the board in April when Arora was booted, according to reCode.

Arora was replaced by Jack Rotolo.

Dan Lagani, company president, resigned in June to go to Diply.

At one point, Mode made a small profit and was considering an initial public offering as recently as February 2013. But the IPO never happened.

The company, with revenue of around $100 million, was hurt by a rapid decline in the price of internet banner ads in the past several years and the rise of programmatic ad buying that sought the lowest-priced ad outlets.

Its unique visitor traffic, once as high as 144 million, had fallen to 102 million by August.

Former insiders said the company was slow to adapt to the move from PCs to mobile and slow to ramp up video and social media outlets.

And in the days when the company was flush with funds, CEO Arora made a number of high-priced acquisitions that did not pan out.

Mode had been shopping for financing for the past five months, it said in the memo.

The memo also defends its decision to keep employees in the dark — until the bitter end. “Had we notified you earlier of the possibility that these efforts were taking place and might not be successful, we believed the potential financing sources and acquirers would be unwilling to provide any financing or engage in any transaction,” it said.

“We sincerely apologies [sic] for this situation greatly appreciate your commitment and efforts in working to keep Mode operating,” the memo said.

Mode had a network of about 12,000 bloggers whom it paid to promote content, but according to the Twitter site #modeowesbloggers, they are not likely to get paid.

Crissy Page @crissy tweeted: “Spoke w/ a @ModeMedia rep on phone at home. Kiss the money they owe you goodbye. Unlikely we will be paid. #ModeMedia $15k+ loss for me.”