“We were told they needed to be in every app to collect information for whatever we did, and the political vertical was one of those reasons,” an ex-employee mentioned. “It would still go in even if the customer said they didn’t want it.”
Knitowski declined to touch upon the allegation. A former supervisor mentioned he labored to maintain the software program out of apps whose purchasers didn’t need it.
At month-to-month conferences, Knitowski would temporary workers on the startup’s prospects for getting purchased by one other firm or attracting angel buyers, one other former supervisor recalled.
The Republican National Committee, in flip, had employed a non-public firm to construct a centralized hub for voter information for right-leaning campaigns referred to as Data Trust, and Parscale joined its board. All the whereas, his staff saved amassing cell phone numbers, and providing Trump supporters MAGA swag in trade for his or her digits.
“This is how Donald Trump stays president for four more years,” Parscale mentioned, holding up his iPhone on stage at a 2018 rally supporting Texas Sen. Ted Cruz’s reelection. “Now this phone is how we connect with you. It’s how we turn you into the army of Trump.”
By early 2019, after Phunware had gone public, former colleagues mentioned Knitowski began speaking about his efforts to court docket the Trump campaign. In April, 15 p.c of the workers was laid off because of “organizational restructuring and cost reductions,” in accordance with a Securities and Exchange Commission submitting.
In July of that yr, Knitowski rang the bell on the Nasdaq. But by then income was dropping and main purchasers have been threatening to depart.
New York-based astrologer Susan Miller, whose glittery horoscope app had been considered one of Phunware’s most profitable, mentioned she would ask for options to be up to date, and nobody would name again.
“Have you ever talked to someone at a party who is always looking at the door and not at you because they want to talk to someone else more? It felt like that,” Miller mentioned. “They just treated me like an old shoe.”
An investor mentioned Knitowski stopped returning his calls, too.
“The guy seems very shady. He is all your best friend when he’s looking to raise money and once you have questions he is nowhere to be seen,” mentioned Scott Walker, who mentioned he misplaced greater than $200,000 after Phunware’s inventory tanked.
In August, there was one thing new to announce: work with American Made Media Consultants, “otherwise known as the ‘Trump-Pence 2020’ and ‘Keep America Great’ Campaign,” Knitowski mentioned in an earnings name.
According to a doc filed with Federal Communications Commission two months later, the corporate’s administrators included campaign operations director Sean Dollman and campaign counsel Alex Cannon.
Phunware would later reveal extra particulars about its work on the Trump app, which would come with location-based instruments and different options to assist the campaign crowdsource new customers. Plus, there can be a gamified loyalty system, the place supporters may accumulate factors to spend on signed MAGA hats or pose for an image with Trump.
By September 2019, 18 p.c of the remaining workers was laid off after shopper Fox Networks Group left, taking a big proportion of Phunware’s gross sales with them, in accordance with filings.
Managers requested engineers in Phunware’s Newport Beach workplace in the event that they wished to work on the Trump app, and a few engineers who have been opposed resigned, a former worker mentioned.
Then in April, as coronavirus circumstances surged and stay-at-home orders shut down enterprise, Phunware obtained a $2.9 million mortgage from the U.S. Small Business Administration’s Paycheck Protection Program, a reduction fund that Congress created to assist small companies preserve staff employed by way of the pandemic.
Phunware COO Randall Crowder denied political favoritism helped Phunware get the mortgage.
“We got no help from the Trump campaign – boy I wish we could have, what a great way to have friends in high places – but that didn’t have any implication on what we did,” Crowder mentioned in a recorded interview.
Phunware declined to return the cash after the administration demanded that public firms that obtained greater than $2 million give it again.
The subsequent month, Nasdaq notified the corporate it may very well be delisted over its funds. To keep listed, firms should meet a set of requirements to reassure buyers that for the reason that preliminary public providing, they continue to be a reputable firm.
SEC data revealed that by July, American Made Media Consultants accounted for one-third of Phunware’s gross sales, paying Phunware greater than $1.6 million within the first half of the yr. The Campaign Legal Center filed an FEC grievance alleging that the Trump campaign and a significant PAC supporting it had shielded their spending on Phunware and different subcontractors by way of American Made Media Consultants.
As the pandemic saved many supporters at dwelling, Trump’s campaign used the app to accumulate new customers remotely, and Parscale touted how the app was retooled to help digital occasions. According to on-line information supplier Apptopia, practically 860,000 folks downloaded the Trump app in July, the identical month Biden’s campaign deserted its first app, Team Joe, and requested followers to obtain a completely new app, Vote Joe (solely 11,075 did).
By mid-November, 2.8 million folks had downloaded the Trump app, which Apptopia CEO Eliran Sapir estimated may give the campaign lots of of hundreds of thousands of telephone numbers, enabling it to achieve folks whose numbers have been saved of their pals’ contact lists however by no means consented to being contacted. A Carnegie Mellon University researcher, nevertheless, estimated the full can be nearer to 27 million because of duplicate telephone numbers.
By then, the app had already laid the groundwork for a coordinated remaining months, permitting campaign officers to mannequin supporters’ habits beneath quarantine and incentivize them to seem at rallies.
“Why is that app so valuable? Because people like sharing messages with their friends from the campaign and getting news and updates,” mentioned Republican advisor Eric Wilson. “But it’s not just an extractive resource. It’s also generating contacts and mindshare on behalf of the campaign.”
Phunware’s monetary troubles hadn’t abated, nevertheless.
In a Thursday SEC submitting, Phunware instantly stopped disclosing its high prospects by title. But by matching the accounting figures to previous filings, AP derived that American Made Media Consultants is Phunware’s single largest buyer, and paid Phunware $2.4 million over the primary 9 months of this yr, accounting for practically one-third of Phunware’s income. Two former workers concurred. The app developer additionally disclosed sizable debt and expressed “substantial doubt about its ability to continue as a going concern.”
On an earnings name with analysts final week, the corporate by no means talked about its work for the Trump campaign, as a substitute specializing in its future development potential. Despite the corporate’s uncertainties, some analysts say it has a constructive long-term outlook as a result of development in cell utilization.
Last month, its inventory rose barely after the corporate introduced it had completed two contracts for Honeywell. Honeywell fired again on Twitter, saying it had requested Phunware to retract its launch, and that the commercial conglomerate “does not have an ongoing relationship with Phunware and does not plan to work with Phunware in the future.”
A second firm, Hewlett Packard Enterprise, advised AP Phunware had publicized a partnership between the businesses the place none existed. Knitowski declined to touch upon both occasion.
“We never had a relationship with Phunware, we don’t have any formalized partnership with them,” mentioned spokesman Adam Bauer. “We didn’t authorize them to issue that press release and we asked them to take it down.”
Associated Press author Bernard Condon in New York contributed to this story.