Enjoy Technology, a startup founded by former Apple retail store executive Ron Johnson, has filed for Chapter 11 bankruptcy protection, Bloomberg reported Thursday. The bankruptcy comes less than a year after Enjoy went public on the Nasdaq via a SPAC merger.
The company, which operates mobile retail stores for tech gadgets, is seeking protection from creditors “due to a rapidly declining cash position that has rendered them unable to pay operating expenses, including payroll,” according to filings viewed by Bloomberg. The company will sell itself to Asurion LLC and plans to keep operating during the bankruptcy proceedings.
Palo Alto, California-based Enjoy is laying off more than 400 employees in the U.K., representing about 18% of its workforce, the filings show.
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Enjoy raised more than $230 million in known venture funding, per Crunchbase data, from backers including Kleiner Perkins, Oak Investment Partners and L Catterton, before it raised another $250 million in total gross capital via its SPAC merger in October.
But the company started issuing warnings in May this year that its cash was dwindling and it had “initiated a review of strategic alternatives.”
Enjoy is one of a growing number of companies that went public via SPAC mergers and are now facing the prospect of being delisted from the Nasdaq due to low share prices. Other companies that have received delisting warnings from Nasdaq as their shares have traded below $1 include used car marketplaces CarLotz and Cazoo and biotech company Clarus Therapeutics.
The company’s filing comes just weeks after Electric Last Mile Solutions, an electric vehicle startup that went public via SPAC in June 2021, filed to liquidate the business via a Chapter 7 bankruptcy.
Bloomberg estimated that there are more than 35 former SPACs that trade below Nasdaq’s $1 listing threshold and at least 65 that are likely to need more financing over the next year to remain solvent.
Illustration: Dom Guzman
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Author: Marlize van Romburgh