Rumors Circling Around Fruugo
There's a number of gossips around the big stealth mode Finnish startup Fruugo currently. The rumor has it they are firing a lot of their employees, their product is late from launch and it hasn't been that well received by potential customers. Fruugo commented earlier they are aiming to become the "trusted 3rd party of e-commerce", set out to solve the problems in the internet ecommerce supply chain making online shopping safer, and "more fun", for both consumers and etailers.
Fruugo is assumed to have tens of millions in funding, and they state having 150 employees. Taneli Tikka also addressed the rumors in his recent blog post, mentioning Fruugo may have been still hiring last month. Fruugo is burning through the cash quite fast with that amount of employees. However, even if the company would be spending around 1M 11M euros [typo corrected] per year, the assumed funding of tens of millions should be enough to carry on operations for quite some time still. If the funding is not as generous, though, Fruugo might be having tough time in the current economic situation.
Fruugo's CEO Reijo Syrjäläinen mentioned in our interview in the summer that the service would be available in closed Beta in a few months. We should see that coming up very soon if the rumors are not true. Taneli has also heard Fruugo would be going for bigger PR at SIME Stockholm.
Building a service sized what Fruugo's comments so far hint of, is likely to be a huge and difficult a task. Thus it may not be any surprise if the old "Pi rule" of startups might have gotten Fruugo as well (take your original plan and multiply the time-to-market by Pi, and divide the expected revenue by Pi).
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I've heard rumours (and Taneli Tikka has written)about burn rate of 1M€ per month (not 1M€ per year). There would be no point in rising capital for ten years expences this early.
With a headcount like that the burn rate is closer to 1M per month, not per year, or at least in the 10M/y range.
Well, if they have 150 employees, the burn rate is closer to 20-30Meur/year, not 1Meur. Plus considering what we know about their plans, namely the part saying "bring retailers and consumers throughout Europe together" implies a lot of footwork at the numerous retailers -> heavy traveling costs.
[...] tech blog ArcticStartups is suggesting something is amiss at Fruugo [...]
Absolutely right - corrected the typo, sorry. I meant 11M/y, assuming ~900k monthly cost (might be too little). If they have as generous funding as the highest guesses they could have cash for over a year more. But as Sami says with extensive travels etc. probably the spending is even higher.
[...] ArcticStartup kirjoitti Fruugon ympärillä pyörivistä huhuista ja arvioi yhtiön kuluttavan rahaa jopa miljoona euroa kuukaudessa. Täten kulutustason laskeminen [...]
[...] tech blog ArcticStartups is suggesting something is amiss at Fruugo [...]
boo.com.. anyone?:D
They did imply this with a few posters at the SIME Helsinki event already but I guess you could say the cat's finally out of the bag. According to the SIME blog Fruugo launches at SIME:
http://blog.sime.nu/2008/11/05/super-secret-fruugo-launches-at-sime-sime08-agenda-feature/
[...] tech blog ArcticStartups is suggesting something is amiss at Fruugo [...]
If Helsinki is closer to you than SIME Stockholm, Fruugo is introducing themselves for the first time in Finland on the 20th at DiViA.
http://www.divia.fi/seminaarit/20_11__digitaalisen_markkinoinnin_kanavastrategiat_ja_kustannuslaskenta.html
It's interesting to hear what they're up to after all the hype, and the recent doubts we've been hearing from inside. I'm probably blogging from DiViA on the 20th if you're interested in Fruugo.
[...] Slush party will take place at Helmi on the evening of 24th. This will be naturally included in the price of the ticket. I just heard a rumor that the mysterious Finnish startup Fruugo might be giving away invites to their Beta at the Slush party. (More about Fruugo here) [...]
Divia... I most certainly won't pay for having to listen to Waltonen.
[...] (TE 5.11.2007) Salamyhkäinen Fruugo pestaa staroja (M&M 8.5.2008) Rumors circling around Fruugo (Arctic Startup [...]
[...] the recent rumors, Janne Waltonen set straight they’ve indeed done some adjusting on the cost structure, [...]
[...] Fruugo’s cash position is healthy after all, as the owners are reportedly not after quick profits - Siilasmaa states confidently “The day [...]
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