MissFresh suspends food delivery services due to financial stress
Fresh food and grocery delivery service provider MissFresh has been forced to suspend most of its business due to financial stress.
The company said an expected transaction of 200 million yuan (US$30.7 million) worth of equity investment hasn't come through from coal mining company Shanxi Donghui Group following a strategic investment deal inked earlier this month.
The temporary shutdown of business and staff optimization will have a material and adverse impact on its financial performance, according to an official filing on Thursday.
It will decide if and when it will reopen on-demand Distributed Mini Warehouse (DMW) services depending on the development of financing and business operations.
It said the on-demand DMW business contributed approximately 85 percent of its net revenue for the first nine months of last year.
Users are only able to purchase next-day delivery orders on the MissFresh site, including packaged foods and daily groceries.
The Nasdaq-listed company has received financing worth hundreds of millions of yuan from Tiger Global and Goldman Sachs.
Shanghai office worker Nani Li, who lives in Changning District, said she hadn't been able to use her account balance to pay for MissFresh orders since yesterday.
"I ordered fresh food from the MissFresh delivery service during the lockdown and its business suspension came as a surprise," she said.
MissFresh's market value stood at just US$56 million as of Thursday, with its share price plunging from around US$6 a year ago to 14 US cents.
Delivery sites have faced tough competition in their efforts to set up storage sites in major cities to enable delivery riders to pick up fresh orders to reach customers within roughly 30 minutes.
