Widely touted start-up goes belly up, failed business model to blame
23 Jan '20
A failure story in Russia’s start-up scene: a domestic start-up for farmer foodstuffs delivery called Foodza announced its closure despite prior investment from the Internet giant Mail.ru Group and international partners.
The owners reportedly decided to wind up the project because “following almost two years of experiments, the company failed to find a sustainable business model that could healthily compete with the traditional marketplace-centered distribution model,” Rusbase reported, citing Vladimir Kholyaznikov, the project founder.
Mr. Kholyaznikov, the co-owner and former CEO of the online retailer KupiVip, set up Foodza in the summer of 2018. In October that year the start-up raised a million dollars from an investor consortium that included Mail.ru Group, an American VC fund called FJ Labs, Larix (a fund owned by Igor Rybakov and Oskar Hartmann), and a few private investors. Following that round led by Mail.ru Group, the investors acquired a total of 15% of Foodza, and the founders retained the rest.
Foodza was a logistic platform that was meant to enable SMEs, including cafes, restaurants, small food retail chains and individual outlets, to buy agricultural produce from small farming businesses. By the end of 2019 the Foodza website went permanently down.
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