UAE's ecommerce platform Sprii goes into liquidation
Source: Arabian Business
Sprii UAE, one of the biggest online shopping platforms “offering everything for mums in Dubai and the Middle East” has been placed in liquidation.
The company, which was founded in 2014 by CEO Sarah Jones and is based in Mazaya Business Avenue in Jumeirah Lake Towers, started with just two employees around a kitchen table, and grew into a multi-million dollar business with a team of more than 100.
It is understood staff were notified of the company’s demise on Sunday, while suppliers have been instructed to send all correspondence through appointed liquidators Grant Thornton.
In a letter to suppliers, Jones said: “As a result of our inability to raise further capital to support the ongoing trading of Sprii, coupled with an unsuccessful campaign to sell the business, I have been forced to take significant steps what will impact the future of the business.
“This is an incredibly sad day for all stakeholders in Sprii. If a sale of the business is not possible, I will be working hard to rehouse all of our team. I appreciate that many of you will feel pain here too, and I will work tirelessly with the liquidator to ensure the best result is achieved for all creditors.”
According to an article in Arabian Business from July last year, the company had just raised $8.5 million in funding. At the time, Jones said: “The first six months of 2019 have exceeded our expectations. We have launched a new app, opened our operations in Saudi and have now finalised our funding round early, which will allow us to continue to deliver on our promise to our loyal customers.”
Suppliers contacted by Arabian Business, speaking under the assurance of anonymity, said that payments stopped in September this year, and although assurances were given that all outstanding invoices would be paid by the end of November, this never materialised.
One supplier, which is owed in the region of AED45,000, said: “We were told that the company was going through an acquisition and that all outstanding bills would be settled by the end of November.
“I had multiple calls with their CFO, with their client managers, with their buyers, every week, and they were all ensuring that the transaction was ongoing and they were very positive that the funds would come and they would be able to pay by the end of November.
“To be fair and honest with them, before then they were paying on the dot, actually on time, like nobody else. They were always very good payers.”
Another, owed around AED45,000, added: “It’s a bit disheartening that this has happened. It’s obviously sad to see a business as well known as Sprii, who has so many award under their belt, for this to happen.
“My losses could have been more but they’re not, so I’m thankful they’re not going to cripple me as a business, but it would have been nice to have had that money obviously. I’m a small business, I’m a mum, it’s taken me years to build my business. As a small business you don’t always get paid yourself because you have to reinvest.”
According to a panel of experts at the virtual roundtable on Intelligent Orchestration of Retail Experience in September, the GCC e-commerce market is expected to reach $19.7 billion by the end of this year. It was revealed that Saudi Arabia is expected to claim the majority of the total ($8.3bn), followed by the UAE, with $7.5bn.
However, in terms of Sprii, a further supplier told Arabian Business: “The user-at-any-cost model didn’t seem very sustainable to anyone. It was just all about market share and it didn’t look like there was enough margin for anyone to make money.
“We’ve had orders in the past week that we’ve not fulfilled. All those customers that are probably buying Christmas presents. I think vendors come at the bottom. We have a lot of money with them but we take that as a business risk. I don’t think an employee takes the risk when they have a contract to work and I don’t think the customers should take that when they’re buying for their children that there’s a risk they won’t get it. I think that is shocking to me.”
