Laid-off employees and investors are suing collapsed Chinese grocery delivery company Missfresh and the Wall Street underwriters who marketed its shares in a $300 million New York offering last year over unpaid salaries and alleged violation of securities laws, reports the Financial Times.
Missfresh pioneered speedy grocery delivery in China, raising more than $1 billion in cash from investors including tech-focused funds run by Tiger Global and Goldman Sachs, to reach a $3 billion IPO valuation. Executives claimed its mini-warehouses and pink-clad riders could make 30-minute grocery delivery profitable, but the company was hobbled by Beijing’s crackdown on the technology sector, slowing economic growth in China and waning investor appetite for funding its losses.
After running out of cash last week and laying off most of its staff, Missfresh’s app was no longer taking orders as of Tuesday in Beijing. The company’s Nasdaq-listed stock has plunged from $13 a share at its listing price last June to 10 cents.