According to a Finnish business periodical, Talouselämä, Fruugo has secured more financing from its current shareholders, Jorma Ollila, Risto Siilasmaa and others. We previously wrote about Fruugo laying off 40% of its staff to cut its burn rate. At the moment, 25-30 people work at Fruugo.
Juha Usva, Fruugo CEO, confirmed that they offered a round to their current share holders and they invested a little less than 1 million euros to the company to keep it afloat. According to Usva, this does not give them too much to rest on as they begin to search for new investments immediately.
With the current burn rate, my guess is that Fruugo has about 6 months to find new financing. Enough time to close those new deals for sure. Secondly, they have just stated that the current share holders are very determined to get the company succeed, which should at least marginally lower the risk of new investors coming aboard.
Fruugo has gone through a lot of difficulties recently and they’ve been much debated in the press and blogs alike. One of the issues that has caused a lot of debate is the fact that they burned through over 14 million euros last year and ran into troubles after that. Nevertheless, we do want to stay hopeful that they’ll find a way out as said before, it’s not just Fruugo that has a lot to lose – the whole Finnish startup ecosystem has its reputation on the table.