E-commerce company Packable has started its liquidation by cutting 138 people or 20 percent of staff after a failed merger.
Once those cuts are done, the company expects to terminate the remaining 372 employees as “individual winddown responsibilities are completed.”
The company was not able to obtain new financing, which might have allowed it to continue operations.
The online retailer was ready to go public through a special purpose acquisition company (SPAC).
But it faced an unexpected blow after the SPAC market dried up and the economy began to slow.
The company said: “We diligently pursued internal and external financing options but were ultimately unsuccessful.
“Given the company has no viable financing alternatives, we are now forced to cease operations, liquidate any remaining collateral, and shut down the business, including the facility you report to.”
Pharmapacks was the top Amazon seller in the US last September, but it currently ranks fifth among the site’s top sellers nationwide.
The multi-marketplace platform has previously received funding from prominent investors like Carlyle Group, Fidelity, and Lugard Road Capital.
In addition to Amazon, the firm sells items on Walmart, eBay, and Target marketplaces.
Amazon was Packable’s main channel by 2020, accounting for 80 percent of sales.
Amazon’s third-party marketplace has grown into the nucleus of its dominating e-commerce business, which accounts for more than half of online retail sales.
The company’s last year has been a turbulent one.
After declaring plans to merge with a SPAC, Highland Transcend Partners, in September, the market began to turn and investors lost interest in SPACs.
The company scrapped the plan to go public in March, blaming “unfavorable market conditions,” just days before Highland Transcend shareholders were set to meet.
The then CEO of Packable Andrew Vagenas departed in April, and Daniel Myers stepped in.
In July, there was still no SPAC because the market had completely evaporated.
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A surge in 2020 and 2021 resulted in over 600 SPACs looking for targets.
But the lack of capital marked a drastic shift for Packable, a firm that had flourished with the onset of the Covid-19 pandemic.
With people confined to their homes, online spending grew, and investors flocked to the space.
Revenue growth slowed last year after hitting double digits in 2020 as the firm battled to negotiate supply-chain constraints.
It has “resulted in significant inventory out of stock, purchase order delays, and delays in onboarding new customers.”
The company’s representatives did not immediately respond to a request for comment.