Buyk

Buyk Corp. was a rapid grocery-delivery app that launched in New York City in 2021 and expanded to Chicago.¹³⁵⁷¹⁶ The company filed for bankruptcy and permanently shut down in March 2022 after Russia's invasion of Ukraine restricted its access to funding from Russian investors.²⁴⁶⁸¹⁷ Buyk had raised $46 million in funding and operated 39 stores before ceasing operations.^367101516

Timeline

Money raised

Buyk raised $46 million in seed funding led by Russian venture capital fund Fort Ross Ventures.⁷ Buyk secured $46 million in capital.³ Buyk raised $46 million in Series A funding at a $200 million valuation.¹⁰ The Series A round was led by CM Ventures, with participation from Fort Ross Ventures, Cherubic Ventures, Citius Capital, and Bravo Unicorn.¹⁰ Buyk's founders provided bridge financing until the next investment round.⁵ Buyk listed assets and liabilities of as much as $10 million each in its bankruptcy petition.⁴

Investors named in the sources: Fort Ross Ventures⁷¹⁰, CM Ventures¹⁰¹¹, Cherubic Ventures¹⁰, Citius Capital¹⁰, Bravo Unicorn¹⁰, LVL1 Group¹¹, R136 Ventures¹¹.

What happened

Buyk was a spin-off of Russia's Samokat, a delivery service based in St. Petersburg, Russia.³⁵⁷ Buyk was founded by Russian nationals Rodion Shishkov and Slava Bocharov.⁵⁷ A majority of the company was controlled by a joint venture of the Russian state-owned bank Sberbank and Russian technology company VK.⁷ Buyk launched in New York City in September 2021.³⁷ Buyk opened seven Chicago locations in late 2021 and early 2022.⁵

Buyk added 20 locations within two months of launching in New York.³ By November 2021, Buyk was averaging 1,350 orders per day across all its locations.³ Buyk planned to expand to 120 stores by the end of 2021 and then 500 more in 2022.³ Buyk promised to hire full-time staffers and provide benefits like medical insurance, commuter compensation, and a 401K plan.⁷ Buyk's CEO James Walker said the company was committed to winning by investing in dedicated, passionate employees.⁷

Buyk relied on low-paid labor, and some observers questioned the viability of its business model in New York.⁷ Buyk's profit margins were thin, similar to traditional grocery stores, and delivery added extra costs.³ Buyk faced supply chain issues that made it difficult to find manufacturers, shelving, refrigeration, and uniforms.³ Buyk had to contend with rotting produce, break-ins, and other accumulating costs.³ In early March 2022, Buyk furloughed 98% of its employees as it struggled to access funding.³⁵⁹

Buyk's access to funding was interrupted due to Russia's invasion of Ukraine.²³⁴⁵⁶⁸ President Vladimir Putin imposed banking restrictions on Feb. 28 that prevented residents from sending money to bank accounts abroad.³ Buyk's founders had been providing bridge financing, but the restrictions made that setup untenable.⁵ On March 11, 2022, CEO James Walker officially laid off employees and told them the company would file for bankruptcy.³ Buyk ceased operations at all 39 stores in Chicago and New York City as of March 4, 2022.⁶

On March 17, 2022, Buyk Corp. filed for Chapter 11 bankruptcy in New York.²⁴⁶⁸¹⁷ Buyk listed assets and liabilities of as much as $10 million each in its bankruptcy petition.⁴ Buyk announced it would permanently shut down and sell off remaining inventory and assets.²⁴⁶ Buyk's CEO James Walker said the war in Ukraine and subsequent restrictions in funding made it impossible to continue operations.⁶ Buyk's financial advisor announced a sale of all assets, including intellectual property, name, and website, in October 2022.¹⁶

Buyk's physical assets included coolers, freezers, shelving, carts, office furniture, and fixtures, many brand new and unused.¹⁶ Bids on Buyk's assets were due by Oct. 10, 2022.¹⁶ Hundreds of people signed up to work for Buyk and suddenly found themselves out of a job overnight.³ Buyk furloughed about 900 workers amid the cash crunch.⁴ Some former Buyk workers accused the company of wage theft and mistreatment.⁷

Two workers accused Buyk of misclassifying them as independent contractors instead of employees, stealing their tips, and failing to provide pay stubs.⁷ A third worker accused Buyk of failing to pay his full wages and firing him when he complained.⁷ Michael Perez filed a lawsuit alleging Buyk improperly classified him as an independent contractor and illegally withheld his tips.⁷ Lorenzo Carse filed a lawsuit alleging he regularly worked 48-56 hour weeks without overtime pay and was not given almost any of his tips.⁷ Jose Bess filed an official complaint with the state Department of Labor accusing Buyk of wage theft.⁷

Buyk's PR representative and lawyer declined to comment on the wage theft allegations.⁷ New York City Councilmember Gale Brewer called for an investigation into whether Buyk's dark stores violated zoning rules.⁷ Councilmember Christopher Marte announced a bill to prevent grocery apps from advertising 15-minute delivery times and to limit the weight of groceries workers deliver.⁷

Legal outcomes

• filedMichael Perez filed a lawsuit against Buyk and Food Start alleging misclassification as an independent contractor, failure to pay overtime, and illegal withholding of tips.⁷
• filedLorenzo Carse filed a lawsuit against Buyk alleging failure to pay overtime, withholding tips, and failure to provide wage statements.⁷
• filedJose Bess filed an official complaint with the state Department of Labor accusing Buyk of wage theft.⁷

Where the founders are now

Buyk was founded by Russian nationals Rodion Shishkov and Slava Bocharov.⁵⁷ The pair co-founded Samokat, a delivery service based in St. Petersburg, Russia.⁵ Slava Bocharov is listed as the founder of Buyk Corp. in Preqin's profile.¹¹

Lessons, as others put them

"It just goes to show how events halfway around the world can impact us here at home so immediately."Jim Humay, Ukrainian Village resident⁵

Sources

1. Two ultra-fast delivery startups shut down in one week | CNN Business, CNN, 2022-03-11
2. Instant Grocery Delivery App Buyk Files for Bankruptcy ..., bloomberg.com, Mar 17, 20
3. The rise and fall of 15-minute delivery startups, an oral history, Modern Retail, 2023-01-03
4. Russia-Backed Delivery App Buyk Shuts Down, Files Bankruptcy (1), news.bloomberglaw.com, 2022-03-17
5. Grocery Delivery Company Buyk Temporarily Shuts Down After Fallout From Russian Sanctions, Block Club Chicago, 2022-03-08
6. Instant Grocery Delivery Service Buyk Closes, Files Bankruptcy Over Russian Sanctions | PYMNTS.com, PYMNTS.com, 2022-03-18
7. Workers Accuse Ultra-Fast Delivery Startup of Wage Theft, New York Focus, May 5, 202
8. Buyk, a Delivery App With Russian Backers, Files for ..., wsj.com
9. Buyk halts service due to financing roadblock, grocerydive.com, Mar 8, 202
10. Buyk raises $46M Series A at $200M valuation, salestools.io, 2024-05-12
11. Buyk Corp. Asset Profile | Preqin, preqin.com
15. An instant grocery app founder showed us the pitch deck he used to raise $46 million and explains why VCs are throwing wild amounts of cash at the sector, Business Insider, 2021-08-16
16. Bankrupt Buyk sells itself off bit by bit, Supermarket News
17. New Chapter 11 Filing – Buyk Corp, abi.org

How this case file was put together

Every statement on this page carries a numbered note, and every note points to a court record, a regulatory filing or a named publication in the list of sources. Each statement was checked against the text of the sources it cites before it was published: a figure, a date or a name the cited source does not contain was cut rather than kept. Allegations are shown as allegations, with their status at the time of the source (filed, charged, convicted, pleaded, settled, dismissed or pending). Quoted lessons are the words of the person or publication named with them, copied from the cited source; nothing here is our own opinion of why the company failed.

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