The founder and chief executive of Gousto, the meal-kit delivery service, is facing criticism from shareholders for taking part in a heavily discounted fundraising while excluding some of his longest-standing backers from the deal.
Sky News has learnt that Timo Boldt acquired shares at a valuation of less than $300m earlier this year, having sold a chunk of his stake at a $1.7bn valuation just 13 months ago.
The revelation has angered small shareholders who were shut out of Gousto’s recent £50m equity-raise, which was undertaken to shore up the company’s finances ahead of an anticipated UK recession.
One investor said it “beggared belief” that Mr Boldt had participated in the most recent capital-raise at the same time as helping to decide that some of his most loyal backers could not benefit from the opportunity.
Mr Boldt, who won the accountancy firm EY’s prestigious Entrepreneur of the Year award last year, quit his previous job at the age of 26 to set up Gousto.
Even at its sharply reduced valuation, his stake is estimated to be worth tens of millions of pounds.
Responding to an enquiry from Sky News, a Gousto spokesperson said: “The secondary fundraise, undertaken in February 2022, provided the opportunity for all Gousto shareholders, both institutional and private small shareholders, to sell down their holdings – many of whom took up that offer.
“The option to sell down was given to all shareholders, allowing them to realise part of their investment and benefit from the support they have provided Gousto to date.
“Smaller, minority shareholders were offered a chance to sell the largest proportion of their stake.
“At the recent fundraise, which was done in order to provide cash headroom as the company enters a potentially volatile period, 90% of the share register, including founder and CEO Timo Boldt, were offered the opportunity to participate, which they did, reflecting Timo’s continued commitment to the business and his belief in its future growth prospects.”
The exclusion of smaller shareholders from the £50m cash call has raised concerns among many of them about corporate governance oversight at the company.
Sky News revealed at the weekend that Gousto, which is backed by Joe Wicks, the celebrity fitness instructor, had slashed its valuation from $1.7bn (£1.4bn) just over a year ago to less than $300m (£250m) last month.
The fall in valuation represented a cut of about 80% in 13 months.
Gousto has also secured another £20m in debt financing as part of its efforts to shore up its balance sheet.
The row over their exclusion has prompted some smaller shareholders to lodge complaints with the company’s board, which is independently chaired by Katherine Garrett-Cox, the former Alliance Trust chief executive.
Ms Garrett-Cox was hired in 2021 to bolster Gousto’s corporate governance standards as it seemingly headed towards a stock market flotation.
Gousto sells subscriptions to recipe boxes and markets itself as offering healthy meals at value-for-money prices, with Mr Boldt describing the company’s ambition to become “the UK’s most-loved way to eat dinner”.
It has attained B Corporation status, which is awarded to businesses with strong ethical or environmental credentials.
One investor questioned whether its B Corp certification was in-keeping with its treatment of small shareholders, some of whom have backed Gousto since its earliest days.
A $150m fundraising in January 2022, led by the giant SoftBank Vision Fund 2, cemented the company’s ‘unicorn’ status – referring to start-ups worth $1bn or more – and paved the way for some investors to reduce their holdings in a separate secondary share sale.
The SoftBank fund is not thought to have participated in the latest capital-raise.
It invested at a significant premium to the valuation that saw Gousto become a unicorn in November 2020, meaning it is now sitting on a huge paper loss on its stake.
Gousto’s other major shareholders include Unilever’s ventures arm, Fidelity International, the railways pension scheme Railpen and Grosvenor Food & AgTech, an arm of the Duke of Westminster’s vast business portfolio.
One investor said at the weekend that “something has gone wrong in the last year, and people don’t see the company taking action to resolve this”.
“And then the company and big shareholders do this significantly discounted fundraise as an ‘open’ offer but does not offer it to all shareholders,” they said.
“Why would the board vote not to offer to all shareholders and why would these big funds treat their fellow investors like this? Are they doing this across all their investments?”
Gousto has in recent months slashed its workforce by 14% and taken an axe to its ambitious hiring plans.
The job cuts reflected the chill in investor and management sentiment towards technology-focused companies’ growth prospects in 2023, even as economic data suggests that any UK recession may be shallower than feared.
Gousto benefited from a surge in demand during the pandemic, and had said it aimed to double its workforce to 2,000 and open two further distribution warehouses.
Bankers at Rothschild were retained some time ago to work on a flotation, although that is now unlikely to take place for several years.
