Tencent-backed online grocery start-up Missfresh has collapsed, shutting down its on-demand distributed mini-warehouse (DMW) service and staff optimisation after large-scale layoffs, and leaving suppliers unpaid.
The company has been struggling financially. Its latest hope, the US$29.6 million funding from Shanxi Donghui Group, has not been finalised.
According to Deal Street Asia, Missfresh owes suppliers around 1 billion RMB, or US$148 million.
The company said the DMW business accounted for approximately 85 per cent of its net revenue for the nine months to September 30. The model offers on-demand delivery services from smaller-sized warehouses closed to residential neighbourhoods.
“The company will decide if and when it will re-open the on-demand DMW business depending on the development of its financings and business operations,” the company said.
However, Missfresh will continue its second-day delivery services, intelligent fresh market business and retail cloud business.
Missfresh raised approximately US$1.5 billion in private funding rounds with investors including Goldman Sachs Group and Tiger Global Management. The Chinese online grocer raised US$273 million after pricing its shares at US$13 during Nasdag IPO last year, taking its value to US$2.8 billion. Since then, the company has lost 97 per cent of its market value.
The company failed to released its annual reports for last year after finding “questionable transactions”. In a press release, it disclosed that “certain revenue associated with these reporting periods in 2021 may have been inaccurately recorded in the company’s financial statements”.