Former UK unicorn Ve Global is in “financial distress” just five years after it was bought out of administration, launching an accelerated sales process for its assets following poorer than expected trading in recent months.
The struggling start-up, which was valued at £1.5bn in 2016, told staff on Wednesday it risked going out of business if a buyer was not found within weeks.
The once high-flying company, which makes ecommerce software used by retailers, has had a rocky history. Previously known as Ve Interactive, the company was a rare British “unicorn” — a start-up valued at more than $1bn — but it entered administration in 2017. The business had made heavy losses and a High Court judge criticised former boss David Brown’s management of the company.
Ve, whose backers include Lloyds Bank director Lord James Lupton, told employees that weaker than forecast trading “prevented [the] unlocking of further funding” from existing investors.
“Ve needs immediate funding to improve its cash flow position,” the company said in a note sent to staff, adding that if the sales process failed, the “worst-case scenario would be the company being wound up”.
Jack Wearne, a former Citibank trader who has run the start-up since 2020, confirmed to the Financial Times that the company had begun a sales process at the start of the year and had several interested parties, but had now accelerated the process. Wearne added that Ve’s management was “working to get the best outcome for our investors”.
“Over the last 24 months, Ve has been building a business that is approaching profitability and would be well-placed to raise external capital,” said Wearne. “Our existing investors have been more than supportive of this process and continue to believe in our mission as a company. We have a strong product in a high-growth sector with long-term customer retention and as such are optimistic about the future,” he added.
Hilco Capital had been enlisted along with an unnamed external adviser appointed by Ve’s board on March 3, according to the note, which said a successful sale by the end of April was still “the preferred scenario, and very much a possible one”.
The 2017 administration of Ve Interactive was controversial, with the company sold for £2mn to a consortium of existing investors. The High Court later removed the administrators so that Deloitte could be brought in to investigate the process.
Ve’s original backers had included David Furnish, the husband of Elton John, along with Douglas Barrowman, a Scottish businessman and husband of Conservative peer Lady Michelle Mone. Barrowman was part of the consortium that bought Ve in 2017. He and Mone resigned from the board in 2019.
The start-up has cycled through several chief executives who have cut staff numbers from about 800 to just over 100 today. Accounts for 2019, the most recent available, showed losses of £11.5mn and revenues falling 30 per cent to £16.8mn.
The accounts said the company was reliant on shareholder funding to continue trading and noted employee disputes in the US, UK, Mexico and Spain. Accounts for 2020 are three months late.
Lord Lupton, who is also a former Conservative party treasurer, and two other investors at present hold a charge over the company.
