I got a call from Kai Lemmetty, one of the co-founders of Floobs, that they are filing for bankruptcy either today or tomorrow. Not a very pleasant call to get by any means, as they’ve been one of the most passionate guys in the ecosystem and been doing a lot of good for the startup scene itself by helping out with organising and live streaming events. The simple reason behind the bankruptcy is that their sales did not ramp up quickly enough to support their current burn rate.
Kai Lemmetty told me that they were almost ready to close their angel round before Christmas, but then things went bottom up. They had a group of angel investors together with a government organisation, all ready to invest into them until one of the parties involved pulled out. This collapsed the whole deal and inevitably sent them a big nudge towards bankruptcy.
Floobs had been putting together a lot of different concepts to capitalise their platform and the sales had picked up relatively nicely, but not by enough. They had signed up with a lot of different football clubs especially in Spain.
Kai Lemmetty told me also that they’ve been putting a lot of effort into making sure the downshift goes smoothly for all parties involved – especially for their clients, but employees as well. They’re finalising plans on how people can get their videos from the service before they shut down. Also, they’re negotiating with other companies and parties on how to support their clients in Spain and not leave anyone in trouble with their product.
There’s no certain date on the shutdown of the service itself, but we’ll keep you updated as things move forward.
Definitely not an easy thing to do in your career, but as I’ve been saying to many people – bankruptcies are more natural in the startup ecosystem than success cases. It’s just something people seem to forget all together. Nevertheless, with bankruptcies being talked about and covered in the light they deserve – they should become more acceptable in the startup ecosystem.
Kai Lemmetty and Joonas Pekkanen haven’t disclosed any future plans yet, but I’m sure they’ll be back sometime in the future after they’ve caught their breath and took some time to hit back with new energy.