A total of 67 bids were placed on the auction site for the business, which is a website called . It lets customers shop for various items online by colour.
The site's founders — volunteers from online marketing and ad agency Nonsense and Oxford-based web designer White October — were hoping the business would fetch as much as £20,000.
Rob Mosley, managing director of Nonsense, said the idea behind the "24-hour start-up" was to show how quickly entrepreneurs can take an initial concept and turn it into a viable business.
The founders began their 24-hour project with a brainstorming session where ideas were pitched and a winner selected.
'Shop by colour' came top, narrowly beating 'DeathVolt', a depository for internet usernames and passwords that are then passed onto next of kin when the customer dies, and a concept called 'Lists' that simply let people compile and share the favourite 'top tens' of anything in a collaborative manner.
Programmers then redesigned open source software that recognised colour in pictures so that it would work for an online retail shop, while the sales team called on affiliate feed specialist TradeDoubler.com to list clothing ranges from retailers Wallis and Dorothy Perkins.
The first colour search was completed successfully one minute before the 24-hour deadline and the site went live two minutes after.