Rumor has it that Finnish social e-commerce startup Fruugo is burning through a heap of cash, both hiring and firing employees at a rapid pace and dealing with some disappointed potential customers. Caveat: the service hasn’t even been launched yet.
Actually, Fruugo seems to have delayed its launch date a number of times already, although at this point they’re likely going for a big push at the upcoming SIME conference, arguably Northern Europe’s largest web event. The company has been in stealth mode to date, and has been signing NDAs with just about anyone they come into contact with. Being secretive and claiming that they will ‘do for online shopping what Google has done for search’ has evidently made Fruugo the talk of the town in Finland’s entrepreneurial community, but it’s still unclear what they’re up to exactly.
It’s definitely a serious venture: they’re assumed to be backed by tens of millions of euros, employ a workforce of around 150 people and its board of directors has been joined by people like Nokia’s former CEO (and current Chairman of Shell) Jorma Ollila, and F-Secure Founder/Chairman Risto Siilasmaa. The biggest investors are Washington DC based Queensway Developments and TEKES.
This is what the Fruugo website reveals about the service:
At Fruugo, we’d like to bring retailers and consumers throughout Europe together for a new kind of shopping experience, one where consumers find a better way to shop and retailers find better ways to grow their business. We want to make it easy for consumers to buy the stuff they want, in their own language and using the payment method they prefer – without the hassle of exchange rates, complex shipping costs, taxes, or staying up all night worrying “am I actually going to get my stuff?” We want to help with all that.
Now tech blog ArcticStartups is suggesting something is amiss at Fruugo HQ.
Local serial entrepreneur Taneli Tikka has been adding fuel to the rumors with a blog post last week saying Fruugo is apparently mass-firing up to 33% of their staff and burning around 1 million euros a month, while customers (merchants) are underwhelmed by what they’ve seen so far.
That’s a lot of gossip for a startup that has yet to release a public beta of their product.
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wow, great great design and creative
Sounds to me like this company might end up suffering from the dreaded “cuil-fail” syndrome. The layout looks quite amateurish from my unbiased web developer perspective.
I’m not convinced about this service just yet.
Dwayne.
http://probablysucks.com
Isn’t this what Boo.com tried to do?
@Andy boo.com is a travel site?!
This has got to be a troll. Well, I bit.
lukas: Andy is referring to what boo.com used to be pre-bubble. http://en.wikipedia.org/wiki/Boo.com
ah ok..thanks..apparently i am too young to know about that
They’ve already got issues just with their pre-sale landing page so i can’t even imagine what hell the dev team must be going through right now with the back-end to try and get this out on time.
Andy-
This is exactly what maybe 20-30 companies (most heavily funded) have tried to do over the last 5 years even. But yeah, boo was one of the first to try and use flash for their product display…. e-commerce platforms aren’t really the strongest of markets to be trying to jump into right now.. You’ve got all the really great open-source (or practically free) ones + then there’s always the old dogs who’ve outlived a lot like volusion (sp?).
should be interesting to see though.
Nice to receive a mention here on this post, especially considering that parts of the text (like the intro for Ollila and Siilasmaa) are about one-to-one from my original blog entry. Thank you for the attention.
The speculation around Fruugo continues. I wold LOVE to see them succeed and certainly think that there’s plenty of problems to solve in E-Commerce and money to be made in getting them solved. It’s a bold & risky venture, all the reasons to like it more and cheer them on!
Funnily enough, one of the biggest problems at the original boo.com was Finnish. The words are so bleedin’ long they had to redesign the front end to fit all the characters in. And filing VAT receipts in Finland…jeez.
Saying you’re going to be as big as Google is a. dumb b. just asking for comeuppance.
Nice quote on the site
“Fruugo will do for online shopping what George Bush did for America.”
FAIL
Its sounds like they are starting to big, I think startups need to build a solid foundation and move from there. That’ll lead to better execution. They probably have a great idea but need more focus
Yeah should have gone the whole way and bought the boo.com domain name as well for their launch. At least the CEO will get to write a book after it all goes bad. Fire up those private Jet planes and massive teams of people that just arnt needed. You cant buy the net….
I have been working in a company, that was planning to do exactly the same stufff as descripbed. it was in 2001. (cross border and multi currency e-shop)
Its not as easy as it looks like and very expensive to build.
But the current exchange rates and Euro can help a lot.
@Taneli Tikka: nice post you wrote and great CV/experience… if you plan to come in London be in touch for some business talk and a few drinks!
I admit I haven’t heard of Fruugo before and now I’m quite curious to see what are they developing.
This sort of news are bittersweet for bootstrapped start ups as you wonder what you could do with a few millions in the bank… well, if you can’t control your nerves maybe you end up losing them!
However, the online shopping space is rich of opportunities, it’s just a matter of cracking that space open and I’m sure that we’ll see new billion-dollar businesses there!
My 2 cents… I co-founded a social shopping site aimed at product discovery, say StumbleUpon for consumer products and although we don’t sell products directly our goal is to connect people to great products they wouldn’t have searched for. http://www.veedow.com/hello
So your target market is those with money burning holes in their pockets? Good luck with that in today’s economy.
One thing these kind of businesses need to keep in mind is the strength of your offline capability to get this business going. Online soultion is just a facilitator in these kind of models. Your actual business leans on your capability to execute this in actual world. Lets say if some one from Israel is going to order something. Who/which vendor is going to deliver the product? What are his delivery strengths? etc…
I worked with Tomas Zeman (commenter above), and it looks like they are trying to do exactly what we were trying to do seven years ago.
Here’s the patent filing* to prove it: http://appft1.uspto.gov/netacg.....0030144922 (reading the title alone will explain it).
*In 2004, I changed my last name from Schrantz back to my original last name of DeNeut.
Looks like they’ll make a splash at Divia on 11th Nov. Finnish Link:
http://www.divia.fi/seminaarit.....kenta.html
Article about Fruugo in leading finnish business newspaper. It is on finnish but the future do not look so good: http://www.kauppalehti.fi/5/i/.....8/11/16390
They should have started out building something that’s small and less ambitious.