Inside Stoqo’s sudden demise

When Stoqo, an Indonesian food logistics startup, announced its shutdown last week, it was widely seen as the first tech casualty of Covid-19 in the country.

But while Covid-19 did play a part, there were more complex reasons behind its demise. The company had banked on closing a series B fundraise, which would have provided it with a lifeline, but the pandemic’s impact on its revenue and customer base was “too significant, too fast.”

Meanwhile, employees were informed of the move just one day before Stoqo was due to halt operations. They also had to grapple with a lack of transparency and “messy” communication from the company’s leadership team.

Ultimately, closing down seems like the right thing to do, though some wonder if – with a little foresight – Stoqo could have been saved.

In a letter sent to employees that Tech in Asia read, Stoqo co-founder and CEO Aswin Andrison explained how the shutdown “was not an easy decision to make” and highlighted the “significant revenue drop” that resulted in cash flow challenges.

“We have tried every possible option, but as [the days] passed by, our situation became worse, not better,” he wrote.

Fundraising plans, interrupted

Founded in 2017, Stoqo sells ingredients and other supplies – anything from garlic and ginger to instant coffee and detergent – to food and beverage (F&B) establishments through its platform.

Its customer base primarily consists of small and medium-sized F&B establishments. The company had targeted larger restaurant chains in its early days, but it has since shifted away from that strategy, an ex-staff tells Tech in Asia. Customer testimonials on Stoqo’s website include remarks from a Mexican taco joint and a third-wave coffee shop as well as school canteens and smaller wartegs that cater to blue-collar workers.

The change in approach appears to have made Stoqo especially vulnerable to a crisis like Covid-19, which has made the “tight cash flow” of the business “untenable,” according to a person with knowledge of the matter. “The company is no longer in a position to operate further at this stage,” the source adds.

But in conversations with Tech in Asia, several current and former employees contended that while Covid-19 was a factor, there were other things at play – so much so that the closure didn’t come as a complete shock. Even though there were no formal indications from management aside from the announcement itself, employees had sensed that there was something going on.

A series B fundraise, for instance, had proven difficult. Employees say Stoqo started the process in mid-2019, but no investments were completed until the shutdown. Before this, the company had raised two rounds of investment from backers like Alpha JWC Ventures, Insignia Venture Partners, and Monk’s Hill Ventures.

Broader issues

The right decision