Supie completed its second capital raise before going into voluntary administration.
Grocery retailer Supie ended all staff contracts with no notice yesterday morning after the company went into voluntary administration, and will not be paying some 120 staff for their last two weeks of work.
Now ex-staff member Anthony Bunce told the Herald all staff contracts were abruptly terminated at 9am on Monday during a meeting run by PwC administrators at the Supie warehouse in Wiri, Auckland.
Voluntary administrators Richard Nacey and Stephen White said in a statement there was unlikely to be enough money to pay employees.
“Following our appointment earlier today, we are now working through the details and the positions of the companies in the group. However, at this point, based on our initial inquiries, it appears unlikely that there will be sufficient funds available to pay wages and holiday arrears,” the administrators said.
Supie and related companies Workerly and Bevie all went into voluntary administration yesterday.
Staff members have told the Herald all company assets are registered under Supie, while staff were paid by Workerly. They said Bevie was the company that included Supie’s liquor license.
Bunce was distraught when the Herald called earlier.
“People were crying, upset and stressed. We can’t pay our rent,” the staffer told the Herald. “We busted our a**es for that place,” he said.
On the Facebook page The Mum’s Collective, a Supie worker said she was owed $1000 for the past two weeks. “I rely on this money hugely for my family. I’m really not sure what to do next.”
This month, BusinessDesk reported Supie founder Sarah Balle was confident about reaching profitability and 100,000 members in the next 12 months after completing its second capital raise.
Balle did not return calls when the Herald sought comment.
New Zealand Food and Grocery Council chief executive Raewyn Bleakley said news of Supie’s administration was disappointing and sad for all involved.
“We welcome all competition in the grocery retailer space – indeed, the more competition there is, the more choice there is, and the better off suppliers and consumers will be, as is the aim of the current market reforms – so this is a blow to achieving that.
“It’s another example of how highly competitive the market is, especially in the current economic climate and with the rising cost of living. Several online grocery retailers in Australia have also folded in the past two years, showing just how tough entering the grocery market is.”
Waikato-based consultant Ernie Newman said it was terrible news.
“Terrible for the staff, the investors, the customers, and especially the brave founder, Sarah Balle. But given the ferocity with which duopolists Foodstuffs and Woolworths Australia defend their ground, it’s no surprise.”
What is significant is Balle’s statement earlier this year that Supie was facing pushback from multiple suppliers demanding that it increase its retail pricing. That’s yet another sign of a dysfunctional, broken market.
“It’s time our incoming Government demonstrated to the community that it understands the difference between the vast majority of businesses that operate and thrive in competitive markets, and the tiny but immensely profitable handful.”
Supie launched in 2021, had 23,000 members by July 2022, and its membership numbers were sitting at the 72,000 mark across the North Island as of October.
Balle previously told BusinessDesk the start-up would “absolutely” hit 100,000 members next year, and also hoped to be able to scale across the whole country “very soon”.
Last July, Balle had a 25 per cent stake in Supie, while Icehouse Ventures had a 14.6 per cent stake.
This month, Icehouse upped its stake to 26.3 per cent, while Balle’s stake is at almost 17.4 per cent.
“One of the barriers to having a duopoly-powered market is that investors don’t want to invest in it because it’s just more high-risk,” she said.
Last July, the business valued itself at $20 million and forecast a net profit of $2.3m in 2025.
Robbie Paul, chief executive of major shareholder Icehouse Ventures, said his firm and others had recently put $1m more into Supie.
Supie had been trying to raise another $3m since May, Paul said. The target was never hit. Those who had offered to support the round would not commit funds unless it was fully subscribed, Paul said.
The Icehouse CEO could not confirm the valuation for the latest attempt to raise capital, but said it was “markedly lower” than the $20m value placed on the company when it last raised capital in mid-2022.
The Herald understands the valuation was slashed to $6m for the latest raise.
Paul said in the new higher-interest, economically-challenged climate, start-ups had to be more realistic about valuations. “It’s not 2021 anymore.”
Founders had to accept valuations on a par with “2018 or 2019″ - giving away a bigger slice of their companies - to raise money.
Supie staff told the Herald they were employed by Workerly.
“We work for Workerly... That’s where there’s a gray area, because there’s no money assigned to Workerly.
“That’s why there’s likely no single penny for any staff for the last two weeks of their work, or for any annual leave or anything they have owed,” he told the Herald.
“It’s probably the worst week it could happen, because it’s a pay week. Everyone’s worked the last few weeks... everyone’s bills and mortgages are lined up to go out this week.
“The shock and the emotion that we saw this morning was because people never thought that this could happen,” he said.
The staffer said those who worked over the weekend noticed the Supie website had been shut down and were suspicious about the company’s future.
Another anonymous staff member posted on private Facebook group The Mum’s Collective: “I understand how hard it is for them to go through this, but for employees like me, we were relying on this to feed our families,” they posted.
“I now cannot afford to buy groceries. One of the employees asked if we could take a box of groceries since we would not get paid, and they said no. The warehouse is packed to the brim with stock. I’m upset they knowingly let us come in and work knowing that we would not get paid.”
Supie had 60,000 customers at the time of its failure, according to Paul.
It worked on a membership basis. Those who signed up for free paid $15 per delivery. Those who took a $99 annual subscription, or $14 per month, got free delivery on orders over $70. Groceries were still being delivered on Sunday evening.
Alka Prasad is an Auckland-based business reporter covering small business and retail.
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