A business that was part of the Australian grocery scene has gone under, despite raising $11 million from investors to run it.
An Australian company that promised to deliver groceries in under 15 minutes has collapsed putting the jobs of 300 staff in Sydney and Melbourne at risk.
The company called Send aimed to take a share of the $122 billion grocery market in Australia by offering everything from fresh produce, dairy products and snacks at retail prices.
The start-up was available in 46 suburbs in Sydney and Melbourne and had 46,000 registered users, but now its gone into liquidation.
Its website no longer works and sign ups appear to be blocked in the app.
Send founder Rob Adams, who reportedly is a high school dropout from Sydney’s northern beaches, blamed world factors for the failure of the company.
“There were a number of circumstances globally that had made it fundamentally harder to raise the necessary capital to scale the business, ranging from the war in Ukraine, harshening global economies and wide spread scrutiny among investors regarding the levels of capital intensity associated with the business model,” he told news.com.au.
“In the end we raised around $11 million. Despite raising a fraction of the capital that our competitors had raised, we managed to outperform them in many respects and achieved fantastic results, testament to our team’s ability to execute.”
He added the decline in the value of tech stocks was substantial and also attributed to the company’s demise.
Administrators Worrells have been appointed to deal with the company’s collapse.
Matthew Kucianski from Worrells said his teams are now investigating Send’s financial position and considering the options for the business going forward.
“Like many tech start-ups, Send had a sizeable cash burn that was being deployed to grow its market share,” he said.
“Send has been successful in building a leading position in the grocery delivery space, however, as a start-up it requires ongoing financial support. Send has faced some unique financing challenges given the composition of its international investors.”
The administrators are exploring the option of a sale, merger or takeover of Send.
There are two other major players in the area, a Young Rich Lister who created a start-up called Milkrun that raised $11 million alone before its launch in September last year and $75 million this year and Voly, which delivers to around 42 suburbs and raised $18 million in December 2021.
Mr Adams said he was hopeful that a new buyer could be found for the business.
“My number one priority above all else right now is in reducing the level of disruption that can impact the livelihoods of our people and working closely with the administrators to ensure a smooth transition,” he said.
“Given the levels of interest pre-administration, I am hopeful a transaction will occur quickly. It’s to these people that I owe all the incredible feats we’ve achieved.”