New York-based eCommerce company Benitago has reportedly filed for bankruptcy, less than two years after raising $325 million in funding.
According to a report from the Wall Street Journal, the firm has sought protection from creditors Wednesday in the U.S. Bankruptcy Court in Manhattan, listing both assets and liabilities ranging from $50 million to $100 million.
The US company is one of a litany of investment groups that acquire businesses selling their products through Amazon, and did so to great success throughout the COVID-19 pandemic.
However, Benitago has since experienced a rapid and dramatic reversal of fortune due to macroeconomic forces, as the e-commerce sector has shrunk dramatically in the past two years.
Unfortunately for the firm, as the eCommerce sector has continued to dwindle, the company as stagnated massively, and now at the time of filing, the company recorded roughly $7.5m in cash.
The issue has been reinforced as the of aggregators like Benitago has levelled off since the middle of last year as the growth in eCommerce demand has pulled back to pre-pandemic levels.
Allegedly, Benitago is planning to restructure its debt and sell off parts of the business throughout the bankruptcy. Court papers have shown that the eCommerce company would even be willing to part with entities that own the intellectual property rights to 15 brands and sell more than 300 products including health supplements, office products and beauty products, court papers showed.
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