London Delivery Firm Falls Into Administration, Leaving Staff and Suppliers Unpaid
A London delivery firm, backed by Chelsea star Raheem Sterling, has recently fallen into administration, leaving the staff and suppliers in a difficult situation as they remain unpaid. The company released a statement expressing regret for the suspension of operations due to funding constraints, with the last deliveries made on July 30th.
The delivery firm, based in Canning Town, specialized in African and Caribbean groceries and it seems that they had been struggling for some time. Court records reveal that the company, known as Oja, had faced eight legal claims for unpaid money since March, totaling over £50,000.
Numerous sources, including ex-employees and suppliers, have raised concerns about the management of the business by CEO and founder, Mariam Jimoh. Employees claimed that they had to wait for months to receive their wages and fees, leading to some resorting to legal action in an attempt to recover their money. One employee even mentioned crying on their shift due to feeling like an unemployed person with a job.
Oja gained attention earlier this year after attracting investment from Raheem Sterling and other backers in a significant funding round. However, it has since been revealed that even before the funding announcement, the company had faced legal claims for unpaid fees and staff disputes over delayed wages. The situation escalated with six further legal claims and complaints from customers about missed deliveries and ignored refund requests.
The cash crisis faced by Oja sheds light on the challenges that delivery app startups face, including intense competition, narrow profit margins, and dwindling investor interest. This news comes as food delivery app Getir recently announced job cuts in a bid to reduce costs.
One former supplier, who severed ties with Oja after months of unpaid fees, expressed no choice but to take legal action, especially after noticing that the food they supplied was being sold at prices below cost. This development indicates a worrisome trend for the business.
Investment director Russ Mould warns that food delivery businesses face numerous obstacles, including competition, customer dissatisfaction, regulation, and increased costs, with thin profit margins. He alludes to the fact that the rise of food delivery has been facilitated by low-cost funding, which conceals the true cost of distance, further exacerbated by rising oil and fuel prices.
Mariam Jimoh, CEO of Oja, acknowledges the challenges faced in 2023 for grocery delivery companies, noting their need for constant funding and the operational difficulties they encountered. Despite their efforts to secure funding and overcome obstacles, Oja delivered its final orders on July 30th and is now under the administration.
Overall, the unfortunate situation faced by Oja highlights the difficulties within the delivery app industry and emphasizes the necessity for sustainable business models and financial stability. The impact on employees and suppliers who were left unpaid raises concerns about the management and financial practices of the company. As the industry continues to evolve, it will be crucial for businesses to navigate these challenges effectively and prioritize the well-being of all stakeholders involved.
