‘Deeply saddened’: Why key Supie investor Kirsty Reynolds pulled her support

Online grocer Supie went into voluntary administration last month.

Prominent businesswoman and angel investor Kirsty Reynolds has explained why she pulled her support for start-up online grocer Supie and its founder Sarah Balle as liquidators comb through the business’ wreckage.

Supie went into voluntary administration on October 30, with creditors then voting in favour of liquidation at a watershed meeting on November 9.

At the time the voluntary administrators said Balle made the decision to appoint administrators following a key investor ceasing to continue providing funding to the business. The investor wasn’t named.

Reynolds said in a statement today that August financials shared by Supie to potential investors in early September showed a substantially positive gross margin, but by October they revealed that the gross margin was substantially negative.

“I am deeply saddened for Sarah and the staff of Supie who worked tirelessly over a two-and-a-half-year period to make Supie a success in the face of fierce competition,” Reynolds said.

“I believed in the business. I tried my best for the business and I invested my time, expertise and significant sums of money to help Sarah and the Supie team to achieve their dream.”

But she said ultimately, it became clear that Supie’s financial issues could not be solved by the level of investment being contemplated by investors.

“On 26 October, I was advised by a member of Supie’s board that Supie had negative net assets of $1.7 million and the board member concluded that even if the full level of indicative funding was received from investors, Supie was trading insolvently.”

Investors, which included major shareholder Icehouse Ventures, had recently tipped in $1m more into Supie, on top of $7.5m previously raised.

“The decision to enter administration appears to have been made by the board on the 27 October, that same day that two of the three directors resigned,” Reynolds said.

The first liquidators’ report on Supie, released last week, showed the business owed more than $2.1m to 4181 unsecured creditors, with liquidators Richard Nacey and Stephen White of PwC continuing to work with secured creditors to realise a sale of the company’s assets.

Around $120,797 in wages and/or holiday pay remains outstanding to about 89 employees, the liquidators’ report said.

The business employed about 118 staff before its collapse. Supie ceased trading on October 30.

The Herald had reported before the liquidators’ report that administrators were working to return between $800,000 and $900,000 in stock to suppliers.

While Supie had around 60,000 customers at the time of its failure, the business ultimately failed due to a lack of sales volume and scale to operate profitably, according to the liquidators’ report, which said less than 5 per cent of members were “active subscribers”.

“The Supie business was a start-up enterprise that operated in a highly competitive sector,” the report said.

“Further, we understand that the business was actively attracting investment capital to fund growth but was unable to secure the required level of investment.”

Balle launched Supie in 2021 and had previously told BusinessDesk the start-up would “absolutely” hit 100,000 members, and had also hoped to be able to scale across the whole country “very soon”.

Cameron Smith is an Auckland-based journalist with the Herald business team. He joined the Herald in 2015 and has covered business and sports.