Russian grocery delivery app Buyk has filed for bankruptcy and is shutting down after sanctions against Russia restricted access to its funding, the company said Thursday.
Buyk halted operations effective March 4 at its 39 locations and plans to sell the rest of its inventory after launching in New York last year and expanding to Chicago in early 2022. The company had raised $46 million. dollars in funding, according to Crunchbase, and listed assets and liabilities of up to $10 million each in its bankruptcy filing Thursday, according to Bloomberg.
“We diligently explored all possible options and partnerships to restructure Buyk and maintain the business, but the war in Ukraine and subsequent funding restrictions unfortunately made it impossible to continue operations,” said Buyk’s CEO. , James Walker, in a statement.
Buyk is a subsidiary of Samokat, one of Russia’s most popular grocery delivery services. Russian state-owned bank Sberbank has a partial stake in Samokat. In late February, the United States placed numerous Russian financial institutions on a sanctions list, including Sberbank, cutting off Buyk’s access to its funding.
Bloomberg reported that the company had considered a sale as a way to secure capital and had arranged a $6.5 million loan to cover bankruptcy costs. About $5 million of the loan will go to paying employees and grocery couriers. Buyk is said to have already laid off 900 of its employees – representing 98% of its workforce – in early March.
“I am extremely proud of the entire team at Buyk for their incredible accomplishments since launching the business last year,” Walker said in a statement. “They are truly some of the most talented and dedicated people I have had the pleasure of working with in my career and I wish them much success in the future.”