Food delivery business Pronto is shutting down as Amazon and Uber muscle in

food

Pronto, a London-founded healthy food delivery startup, is shutting down after running out of money to sustain itself, according to The Times and The Truth About Equity Crowdfunding blog.

Founded in 2014, Pronto reportedly struggled to raise a new round of funding in the last week and is terminating its operations as a result.

The company will cease trading from September 2016 and is looking for a buyer.

Pronto raised $1.6 million (£1.2 million) last August and £800,000 on crowdfunding platform Seedrs in June but it needed more capital in order to compete with the huge marketing budgets of companies like Uber and Deliveroo, who have raised $12.5 billion (£10 billion) and $200 million (£152 million) respectively.

"It is with deep regret that I must inform you that we have had to make the decision to shut Pronto," reportedly wrote Pronto founder James Poulter in a letter to shareholders. The full letter can be read below.

Jeff Lynn, the founder and CEO of Seedrs, provided The Truth About Equity Crowdfunding with the following statement:

"Pronto raised money on Seedrs earlier this year in a round led by prominent institutional investors Seedcamp and Playfair Capital. As planned, the Pronto team invested the funds into a hyper-growth strategy, but unfortunately despite their hard work they have had to make the difficult decision to cease trading. It is always unfortunate when a company fails, but failure is a common part of early-stage ventures due to their nature. Alongside Seedcamp and Playfair Capital, Seedrs will work with the business to ensure any remaining assets are distributed to shareholders and those investors with eligible EIS investments are able to claim their tax relief. We will as always keep Seedrs investors informed throughout the process."

The termination of Pronto comes less than two months after rival firm Take Eat Easy filed for administration.

Pronto did not immediately respond to Business Insider's request for comment.

Here is Poulter's full letter to shareholders (via The Truth About Equity Crowdfunding):

All

It is with deep regret that I must inform you that we have had to make the decision to shut Pronto.

To be honest, there was hardly a decision; there was no choice. It was now our only option. As, over the last week we have had all fundraising options fall through. And now it would be wrongful for us to continue trading. We have had very lofty goals for this business. Goals that we knew, and have been clear, required significant funding to allow us to execute.

I have not managed to raise any of these further funds.

I think I will write in more detail about some things, however, right now, there are a brief few things I would say.

- You backed something that worked, and could have been unbelievably huge. There are no words that could understate the impact Pronto could have had.

- My entire team has given everything a human could be asked to do to make this work.

- There was no 'fat' in the business that we could have trimmed to give us any longer, everyone and everything was critical.

- As with everything Pronto, there is a lot more involved with our wind up than just sending everyone home, so closing will take some time.

- There are a number of parties that may be interest in our technical talent + technology. We have the most advanced tech for last mile delivery that is operating in London. However, our tech being entirely proprietary is designed exactly for our purposes. And as there is no one doing what we do in London, or trying to, and as repurposing it is probably impossible, there is more interest in just the technical team itself. I am pushing and will update if anything positive comes from this.

Finally, I am vividly conscious of every £ you have given.

Vividly conscious and thankful. I am writing this to an overwhelming portion of individuals who know my team or I, personally, and I can only again reiterate how much we thank you for your trust.

I am entirely sorry that I have not made this work.