Singapore startup Gushcloud rebuts Xiaxue’s accusations

Xiaxue is back.

Singapore-based blogger advertising network Gushcloud received an unpleasant Christmas surprise this morning. Xiaxue, a popular but polarizing blogging personality whose real name is Wendy Cheng, wrote a scathing takedown of Gushcloud and its allegedly dishonest practices. Xiaxue is affiliated to Nuffnang, a rival Singapore-based agency that she calls an “ethical company headed by ethical people.” She also owns shares in the company.

The article came out of a one-year investigation by Xiaxue in which she went to the extent of setting up a shell company and buying ads just to reveal Gushcloud’s practices. When contacted on December 23 by Tech in Asia, Gushcloud did not address the specific allegations, but issued a statement saying that the article is inaccurate.

“We think that the Blog Post was calculated to disparage and injure our reputation. The timing of the release of the Blog Post also speaks for itself. We are currently taking legal advice and reserve all our rights against Ms Cheng in relation to the Blog Post,” Gushcloud said in a Facebook post. The firm started a hashtag called #FaithInGushcloud to rally support. A day later, the company’s co-founder Althea Lim later issued a statement disputing one of Xiaxue’s claims. This was followed by a substantial response from CEO Vincent Ha addressing all the allegations.

Here is a summary of Xiaxue’s accusations, along with Gushcloud’s reply. Nuffnang also answered our queries.

Xiaxue: Gushcloud inflated its earnings to the press.

Gushcloud: It was an honest mistake.

The company told The Straits Times in November 2012 that its monthly revenue was S$170,000 (US$129,000), up from S$25,000 (US$18,900) in February that same year. However, after digging through publicly obtainable records, Xiaxue found out that that company’s annual revenue was more like S$396,005, or a monthly average of S$33,000. She writes in her typically acerbic tone:

Let’s just give them the benefit of doubt. They said that their revenue went up and that in February it was only S$25,000 per month. Let’s imagine that only in November, when this article is published, did their revenue suddenly become S$170,000 per month. From January to October it was S$25,000.

(S$25,000 x 10 months) + (S$170,000 x 2 months) = S$590,000

Tadah, STILL seems like inflation to me!!!

Ha says that 2012 was a poor year for Gushcloud due to business model changes, but things picked up towards the end. Most of its revenue made that year came in the last three months. An employee gave the wrong figures to the press and on hindsight, Ha admits that they should’ve issued a clarification earlier.

Xiaxue: Gushcloud gets bloggers to write posts that are disguised ads.