Finnish startup Fruugo avoids meltdown with approx. €1 million i. Finnish startup Fruugo fascinates me to no end. Founded in late 2006, the company set out to build a massive pan-European social e-commerce service, which it finally launched in closed beta at the beginning of this year. Their mission statement? To make Fruugo the equivalent of Google in search when it comes to social commerce on the Web.
The company reportedly raised dozens of millions of euros, at one point flirted with an employee headcount of 150 to 160 people (including contractors) and boasted a rock star board of directors that included people like former Nokia CEO and current Chairman of Shell Jorma Ollila as well as F-Secure Founder/Chairman Risto Siilasmaa. In 2008, they burned through about 14.5 million euros before they even put the closed beta product live and were ultimately forced to lay off almost half of its workforce as a result.
This is what Usva just informed me by e-mail: “Fruugo recently arranged a share issue, directed to existing shareholders. Lessons from 10 disappointing tech stories of 2009. So it’s the end of 2009 and an appropiate time to take stock. We’re not going to bore you with a long analysis of the year. Suffice it to say that funding for startup tech companies remains tight. And when VCs are running out of LPs to go to, you really know it is. The VC model is still finding its feet in a market where exits are still not that clear. For many companies 2009 was a nightmare – especially the first half. But anecdotal evidence I’ve been picking up suggests that confidence in the European tech scene re-started tentatively after the summer.
Hoepfully, conversations that have been going on for the last few months will see the light of day in new announcements, launches and, I daresay, one or two exits in the new year. The European scene remains disparate and spread out. But before we hit the new year running, let’s look at a handful of companies that aimed for the moon only hit the next field in 2009. Lesson learned: Where do we start? Lesson learned: See Raj’s blog post. How Working On Wall Street Screwed Yipit When They Tried To Laun.