With the announcement that non-essential businesses will be reopening later this month, it’s time to acknowledge that, unfortunately, many businesses will not have made it through. COVID-19 has hit large swathes of businesses across the ecosystem, and it will be far from ‘business as usual’ for the foreseeable future. Whilst much attention has been focused on how the coronavirus pandemic is taking a toll on high street retailers, many startups have quietly pulled down the shutters on their businesses.
Using the latest Beauhurst COVID-19 Impact Data, we’ve profiled seven businesses that have shut up shop due to the pandemic. From fintechs to food outlets and medical device manufacturers, we show how these once promising startups have made the difficult decision to close for good.
Founded: October 2017
Location: Tower Hamlets
Founded in October 2017, TokenAnalyst was a fintech company that developed software to track blockchain transactions and provide real-time cryptomarket intelligence. The aim was for the platform to deliver greater transparency in the blockchain industry. The company had good success and built a host of tools that made blockchains easier for users to understand, and secured a total of £1.05m in fundraisings across two rounds in 2018.
Token Analyst does not explicitly state why they had to shut down operations, but given that it launched during the initial coin offering boom and surge in crypto prices, they may have struggled to maintain momentum, especially in the wake of COVID-19.
However, it’s not all sad news, co-founders Sidharth Shekhar and Sharanjai Prasad, have both moved on to senior positions at digital currency wallet platform Coinbase. Commenting in a company blog post: “We remain committed and driven towards creating an open financial system for the world and we think that Coinbase is a fantastic place to do that.”
Founded: August 2013
Sector: Consumer Goods
Launched in 2014 from a café basement in North London, Sandows brewed and sold ready-to-drink cold coffee beverages. The business began with co-founders Hugh Duffie and Luke Suddards working shifts in the coffee shop above in exchange for space to make their cold brew coffee in the basement. This side hustle soon turned into a full-time business, and the company was going from strength to strength. In 2015 Sandows raised £124k through CrowdCube, and then raised a further £781k in 2016. The startup also partnered with numerous London cafés, traded online with a subscription based model and even launched into Sainsbury’s stores Nationwide.
However, Sandows sadly stopped trading not long after lockdown restrictions came into force, suggesting that things were already on a downward trajectory. Whilst no explicit reason is given for the closure, and with the cold-coffee beverages market currently booming, this small business most likely struggled to compete with the big industry players producing similar products. In Sandows closing statement they said “We hope that people will share with us in remembering the good times and continue to support small businesses like ours in this ever challenging environment.”
Founded: July 2014
Sector: Entertainment and events
Headliner had developed an online booking platform for entertainers and musicians, to provide them greater control over their performances and choose opportunities best suited for them. Performers could create profiles on the site, then event organisers would contact the acts to book them for performances. Founded in 2014 by Stan McLeod, Rosario Zuniga and Maria Hayden, the company started off strong, attending the Techstars London accelerator programme 2015 and securing £545k in equity funding. At one point Headliner had over 4,500 artists on it’s platform and booked big name talent for private events including Hercules & Love Affair, Groove Armada and Razorlight.
Needless to say, the COVID-19 pandemic has had a particular impact on the music industry. Numerous festivals, concerts, and venues have been forced to cancel events and close their premises. The live music sector is expected to suffer £900m in losses this year (81% of its annual contribution to the UK economy) according to figures from the UK Live Music Group.
Unfortunately, Headliner announced that they were ceasing operations permanently in April 2020, stating “We have worked tirelessly to provide a sustainable career for artists through live music performance. We feel proud about what we have achieved and the technology we have built to facilitate this. However, now is the time to move on to pastures new.”
Founded: September 2013
Location: West Sussex
Sector: Medical Device
BodyChillz designed and developed medical technology for core body cooling. The initial product was called CAERvest which was an unpowered and portable medical device that, when placed on a patient’s torso, was designed to provide a powerful cooling effect in the event of heat stroke or cardiac arrest. The idea was that this could delay the full effects of the condition by up to 30 minutes, preventing death or brain damage, and ultimately provide a better survival rate for sufferers.
Founded in 2013 by co-founders Jonathan and Mark Weinberg, BodyChillz secured £462k in equity fundraising, but it appears to have struggled to get CAERvest to conform with regulations for medical device manufacturers. The last significant move toward this was in January 2019 when CAERvest was in prehospital trials with cardiac patients in Europe.
Unfortunately, BodyChillz announced the company was closing in May 2020, ultimately citing an inability to sell enough of it’s product: “We know 9/10 medical devices ultimately fail, but it is particularly difficult when a device to save lives, which has saved every life it has been asked to save, does not sell enough for us to continue.”
Founded: July 2016
Location: City of London
Founded in 2016, LiquidityChain provided software to businesses in the capital markets industry that allowed them to unlock liquidity. The application afforded users anonymity both pre and post trade, and included an alert system that highlighted potential trading opportunities. In 2017, they partnered with and secured investment from TP ICAP, a large interdealer broker. However, following this, the company flew relatively under the radar.
In May, it was confirmed that the company had closed; “due to the challenging conditions within the illiquid bond credit market, the shareholders of LiquidityChain have mutually agreed to conclude the project.” However, it seems founder and former CTO Richard Smith had already been planning to jump ship, having founded a similar company called Bondchain in March 2020.
Founded: March 2014
Sector: Catering Service
Food Story operated a luxury kosher catering service designed for events, weddings, and barmitzvahs. Previously run by the Sobell family for three generations, ownership of the company transferred to Jonathan Hammé, Justin Randall, David Swann and Michael Paradise in 2014. They rebranded the business and launched into London’s luxury event scene in 2015.
The company quickly made a name for itself. In 2016, Food Story was appointed by the Historic Royal Palaces as the sole kosher caterer, providing food for a list of enviable historic venues, including Kensington Palace, Hampton Court Palace, Banqueting House and the Tower of London.
But the outbreak of COVID-19 sent shockwaves through the catering industry, and the company pulled down the shutters in the middle of March. It explained that “it is with great sadness that we have taken the very hard decision to close the Food Story London event catering business with immediate effect. The cancellation of events and general uncertainty caused by the Coronavirus has left us with no choice.”
Founded: May 2017
Location: West Dorset
Founded in 2017, Dorset based prop-tech Habiplace developed a digital platform to allow users to manage all household admin, including house bills and searching for new properties. The company developed a suite of products, HabiSearch, HabiHome and HabiAgent in order to create a property network. In March 2018 the company raised £55k, followed in June 2019 by a further £305k investment. However, this was sadly not enough to carry Habiplace through the current pandemic.
In May 2020, Founder and CEO Stephen Green explained why this was the end of the road. He said: “You may wonder why, as a digital business, we have been affected by the crisis. The answer simply revolves around investment. We were trying to raise our next round of investment and then the crisis hit; as a result, the vast majority of investors have, understandably, tightened their purse strings.”
The demise of Habiplace is a reminder that young seed-stage companies, despite their agility, are being hit particularly hard by COVID-19. Our latest research found that funding has dropped by 85% for tech startups raising investment for the first time, compared to the same period in 2019. This is a reminder that those younger stage companies, even those who have previously raised small amounts of funding, are in need of investment now, more than ever.