Firm is not insolvent and intends to honour all its commitments to operators, customers and staff
On-demand intercity travel provider Snap Travel Technology, founded in 2016, paused its operations on Tuesday 18 June while discussions continue with funding partners.
Snap, which grew 500% year-on-year last year, is a startup backed by the venture capital funding markets.
The business has proved the ability to generate gross profits in individual cities but is not profitable at a business-wide level, hence requiring ongoing investment. It says this is ‘not an unusual model for businesses such as Snap that have a central tech development overhead.’
The investment round that Snap kicked off in January has not yet closed, so the business has decided to scale back its cost base until it is.
Snap is not insolvent and intends to honour all its commitments to operators, customers and staff.
Thomas Ableman, Founder and CEO of Snap, said: “Despite Snap’s rapid recent growth and outstanding feedback from customers, we have not yet secured the funding necessary to support our ambitious growth plans.
“Despite strong support from our largest investor, we still need to close a deal with new co-investors to ensure we have sufficient growth capital for future cities”
“Many businesses at this stage would keep quiet, carry on fundraising in the background and not reveal there was a problem until they went bust.
“That is not the kind of company I have set out to lead. We are pausing while we still have plenty of cash in the bank.
“All our operators will receive full payment for trips run and will be offered payment equal to the profits they would have earned for future contracted trips. All customers will receive a full refund.
“Our fantastic operators have, so far, carried 220k people over 25 million miles with 90% of customers rating their experience five star.
“While our funding round may be slower than we’d hoped, I am proud of the incredible achievements of the Snap team and am confident we have great things ahead of us.”
Read more news stories here: cbwmagazine.com/category/news
