Fruugo has burned through 14,5 million euros in 2008, according to an article in Kauppalehti. Last year’s books show (in Finland these are public for all limited liability corporations) that Fruugo’s net loss for the year is 14,5 million euros and with no income, this is the investment Fruugo used in 2008.
Fruugo is the much debated startup from Finland that has gathered a lot of media attention in the recent year. One of the reasons they have done so is their attractive and well known board members that include Risto Siilasmaa (Founder, F-Secure), Jorma Ollila (former CEO and Chairman of Nokia) and many others. Fruugo’s main product is a webshop that would aggregate all the different webshops into one.
Juha Usva, Fruugo’s CEO, has commented that since then the burn rate has been cut down well below a million euros a month. Last year’s financing was handled by a three major parties; 5 million capital infusion, 5,5 million capital loan as well as 1,5 million euros from the Finnish technology fund Tekes. In total however, Fruugo has used more than 18 million euros since its 2006 and 2007 income statements show a 3.3 million euro cumulative loss.
Last week, Fruugo’s meeting of shareholder’s granted the board to issue a stock emission in order to get more cash into the bank account. Mr Usva is still very secretive on the amount of new investors they are looking at. However, with the size of the burn rate they have, I’m guessing they are pitching for millions of new euros if not over 10 to guarantee a safe runway for the next year. In this market, it is nothing but easy.
Furthermore, Mr. Usva commented that autumn will show how well Fruugo will pick up. “At the end of the third quarter we have such a list of features and a supply of products, that one can say we are ready to start the race”, said Usva in the Kauppalehti interview. Currently they have about 200 seller contracts, but not all of those are integrated into the system yet. During autumn the plan is to grow that by hundreds.