Melbourne startup Shebah has been placed in voluntary administration, a victim of ongoing lockdowns during the Covid pandemic.
Administrators Sam Kaso and Rachel Burdett of Cor Cordis said they will try to save the country’s only women-focused rideshare business through a sale or restructure.
“Shebah will continue to operate as normal while we stabilise the business and assess the operations before calling for expressions of interest,” Kaso said.
Shebah founder and CEO Georgina McEncroe has spent much of the pandemic trying to find new investors for the business, but as ongoing and extended lockdowns hammered customer numbers, the rideshare ran out of both time and money.
McEncroe said revenues had plummeted by 70% due to Covid during the latest shutdowns in NSW and Victoria. This time however, the crippled business didn’t meet the requirements for state government support.
“Our drivers received some JobKeeper assistance but the company did not qualify for government assistance because we were not required to close down,” she said.
“We have been trying to attract more equity for more than a year but potential investors had no clear line of sight on when things would return to normal. We were hoping we could hang on until the states were fully open, but we ran out of time and had no option but to appoint Voluntary Administrators.”
McEncroe said Shebah has a pool of 1000 drivers, but less than half were active during lockdowns. The typical driver is aged 49, single, with older children.
Blow to women
The business launched in 2017, and until yesterday, jointly held the record for the country’s biggest crowd-sourced funding raise, with 2126 small investors backing a $3 million campaign in March 2019, followed by another $700k round in late 2019.
The company had been making up to 10,000 trips a month nationally before the pandemic hit, including children to and from school – it’s the only rideshare with a licence to transport unaccompanied minors.
McEncroe said it would be another blow to women at a time when they’ve been hard hit if Shebah could not continue.
“Women have suffered disproportionately during Covid and we have learned how much many women rely on this service to make them feel safe for themselves and their children,” she said.
Sam Kaso from Cor Cordis is optimistic that the venture will remain a going concern, despite the highly competitive – and in general loss-making – nature of the sector
“Shebah has some unique qualities and upside in a market that will recover as lockdowns are lifted, so we hope to get some strong interest,” he said.