Startup and eCommerce site Sky.Garden is closing shop following a detailed story first published by TechCrunch.
Sky.Garden, which is no stranger to local online shoppers, has been doing very well in the past, but according to its top leadership, it no longer has sufficient funds in its coffers to run operations after this month, October 2022.
So, what has really prompted this move that will see many employees go out of a job? Well, here is what we have managed to gather so far based on the Tech Crunch piece, which is also based on the firm’s CEO talk to employees.
Well, to begin with, Sky.Garden, which has less than 50 employees, does not have sufficient funds to continue with its operations, which basically entails linking up electronics merchants to buyers in the same way Amazon works. MD Martin Majlund supports the point that 2022 has been very tough for startups across the world.
The MD says that while some local startups have been very successful in terms of raising from venture capital firms, others have not been so lucky. There is an overall feeling that VC funding is slowing down, and those pursuing new investments are doing so carefully, and slowly.
This, according to the MD, is thanks to the Ukraine crisis, inflation, and an overall jump in the price of products and services.
In the last quarter, for instance, tech stocks dropped substantially across multiple stock exchanges. This has forced VC companies to warn their start-up co-founders that worse days are coming.
It is so bad that central banks in different parts of the world have been looking everywhere to draw gradually to a close the COVID-19 era stimulus that reportedly accelerated valuations. Some have hiked their interest rates, with notable selloffs in equity markets, even for startups. The development continues to haunt such as Sky.Garden to date.
All is not lost, though, because MD Martin says that the firm is still solvent, and there are ongoing talks with potential investors. Sky.Garden had previously managed to raise USD 4 million in a Series A round in 2021, four years after the startup was founded. This totaled USD 5.2 million of the overall funds raised from investors.
“Sky.Garden has had a positive impact on thousands of small businesses, hundreds of thousands of consumers and hundreds of boda boda drivers for the past six years. We strongly believe we can continue this impact with the right partner going forward,” Majlund told TechCrunch.
It has been tough for startups as a whole. Thousands of them have been forced to reduce costs and cut down their staff.
Specifically, startups laid off nearly 77,000 employees in the nine months of the year.
Between January and April, startups reported nearly 13,900 job cuts across the globe.
You can read the full story on Tech crunch HERE.
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