[London, ENGLAND] European co-operative purchasing Web
site Letsbuyit.com has pulled back from the brink by
raising EUR 4 million (US $3.7 million) from investors.
However, a Dutch court set a deadline of February 7 for
Letsbuyit.com to raise EUR 28 million (US $26 million).
This means the company will need substantially more
funding, a fact understood by today’s investors.
German venture capitalist Kimvestor has indicated that
it could inject up to EUR 50 million in Letsbuyit,
although negotiations are still proceeding.
Brave risk-takers were rewarded Thursday morning by
seeing their shares in the almost-defunct Letsbuyit
double in price.
Last week Letsbuyit’s management said that there
were “possibilities for survival,” a statement that
is proving to be correct. The company was granted a
suspension of payments at the end of December 1999,
after which its financial situation and prospects
appeared to worsen.
The fundamental idea behind Letsbuyit.com — on
which fortunes are now being won and lost — is
for consumers to order large numbers of products
in a virtual Internet department store through
“co-buys.” The company operates in the Netherlands,
England, Sweden, Germany and Italy.
Despite Thursday’s reprieve, Letsbuyit.com will
need to work hard to restore the confidence of
consumers and investors alike. Many customers
have not had their outstanding orders fulfilled
— and were still unable to contact Letsbuyit
on Thursday morning.
One influence that may have helped Letsbuyit
was the extensive (if premature) “post-mortem”
conducted by analysts and journalists following
its collapse. Nearly everyone said it was based
on a brilliant idea, and a few said it was simply
underfunded.
