Gousto, the food delivery service backed by Joe Wicks, the celebrity fitness instructor, has become embroiled in a bitter corporate governance row after excluding long-standing investors from a deeply discounted share sale.
Sky News can exclusively reveal that Gousto slashed its valuation from $1.7bn (£1.4bn) just over a year ago to less than $300m (£250m) last month when it secured £50m of new funding from some of its biggest shareholders.
The fall in valuation represented a cut of about 80% in 13 months, according to insiders.
Gousto has also secured another £20m in debt financing as part of its efforts to shore up its balance sheet, according to insiders.
While steeply discounted capital-raisings have become commonplace during the technology downturn of the past year, Gousto’s decision to shun investors holding just under 10% of its shares has sparked uproar.
The row has prompted several 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.
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The meal-kit delivery company was founded in 2012 by Timo Boldt and James Carter, two former investment bankers, with the former winning the accountancy firm EY’s prestigious Entrepreneur of the Year award in 2022.
Mr Boldt quit his job at the age of 26 to set up the company.
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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.
Image: Katherine Garrett-Cox was hired in 2021 to bolster Gousto’s corporate governance standards
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.
A number of institutions which are not currently shareholders in Gousto were, however, also approached about the so-called open offer of shares, according to one insider.
‘Something has gone wrong in the last year’
The decision to gauge the appetite of a number of prospective new investors has further angered the existing shareholders who were excluded from the process.
One investor said this weekend: “Gousto is a great business and Timo has been a great founder/CEO, but clearly 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.
“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?”
A spokesman for Gousto declined to answer questions about the capital-raise other than insisting that the open offer had been extended to over 90% of the company’s investor base.
Volatile economic conditions
The row at Gousto raises wider questions about shareholder rights at large private companies, particularly those which have gone through multiple rounds of funding.
While Gousto is not in any immediate financial difficulty, it told shareholders that the latest £50m was designed to steer it through more volatile economic conditions.
The governance row in which it has become embroiled has also prompted questions about the role of Ms Garrett-Cox and Gousto’s other independent board members.
Workforce slashed
The former Alliance Trust chief was forced out of that post following a battle with the activist fund Elliott Advisors.
This weekend, Ms Garrett-Cox declined a request to speak to Sky News.
A person close to Gousto said the redundancy round equated to fewer than 100 employees, implying that its announcement in 2020 that it would create 1,000 new jobs by the end of 2022 had failed to bear fruit.
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.
Surge in demand during pandemic
Prior to the latest funding round, Gousto secured $150m of new capital in January 2022, which was followed weeks later by a $230m secondary share placing.
It 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.
In its 2020 financial year, Gousto saw revenue more than double to £189m, up from £83m during the prior 12 months.
It also reported underlying earnings before interest, tax, depreciation, and amortisation in 2020 of £18.2m, against a loss of £9m in 2019.
Bankers at Rothschild were retained some time ago to work on a flotation, although that is now unlikely to take place for several years.
An industry body has warned that the equivalent of more than one pub a day is set to close across Great Britain this year.
According to the British Beer and Pub Association (BBPA), an estimated 378 venues will shut down across England, Wales and Scotland.
This would amount to more than 5,600 direct job losses, the industry body warns. It has called for a reduction in the cumulative tax and regulatory burden for the hospitalitysector – including cutting business rates and beer duty.
The body – representing members that brew 90% of British beer and own more than 20,000 pubs – said such measures would slow the rate at which bars are closing.
BBPA chief executive Emma McClarkin said that while pubs are trading well, “most of the money that goes into the till goes straight back out in bills and taxes”.
“For many, it’s impossible to make a profit, which all too often leads to pubs turning off the lights for the last time,” she said.
“When a pub closes, it puts people out of a job, deprives communities of their heart and soul, and hurts the local economy.”
She urged the government to “proceed with meaningful business rates reform, mitigate these eye-watering new employment and EPR (extended producer responsibility) costs, and cut beer duty”.
“We’re not asking for special treatment, we just want the sector’s rich potential unleashed,” she added.
The government has said it plans to reform the current business rates system, saying in March that an interim report on the measure would be published this summer.
From April, relief on property tax – that came in following the COVID-19 pandemic – was cut from 75% to 40%, leading to higher bills for hospitality, retail and leisure businesses.
The rate of employer National Insurance Contributions also rose from 13.8% to 15% that month, and the wage threshold was lowered from £9,100 to £5,000, under measures announced by Rachel Reeves in the October budget.
Donald Trump has revealed a list of more nations set to face delayed ‘liberation day’ tariffs from 1 August.
He has threatened tariffs of 30% on Algeria, 25% on Brunei, 30% on Iraq, 30% on Libya, 25% on Moldova and 20% on the Philippines. Sri Lanka was later told it faced a 30% duty.
Letters setting out the planned rates – and warning against retaliation – are being sent to the leaders of each country.
They were the latest to be informed of the president‘s plans after Japan and South Korea were among the first 14 nations to be told of the rates they must pay on their general exports to the US from 1 August.
The duties are on top of sectoral tariffs, covering areas such as steel and cars, already in place.
Mr Trump further warned, on Tuesday, that a 50% tariff rate on all copper imports to the US was looming.
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He has also threatened a 200% rate on pharmaceuticals and is also expected to take aim at all imports of semiconductors too.
The European Union, America’s largest trading partner in combined trade, services and investment, is expected to get a letter within the next 48 hours unless further progress is made in continuing talks.
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The bloc, which Mr Trump has previously claimed was created to “screw” the US, has been in negotiations with US officials for weeks and working to agree a UK-style truce by the end of the month.
The EU has retaliatory tariffs ready to deploy from 14 July but it is widely expected to delay them until such time that any heightened US duties are imposed.
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It remains hopeful of a deal in the coming days but European Commission president Ursula von der Leyen told the European Parliament: “We stick to our principles, we defend our interests, we continue to work in good faith, and we get ready for all scenarios.”
While the UK’s so-called deal with Mr Trump is now in force, it remains unclear whether steelmakers will have to pay a 50% tariff rate, deployed by the US against the rest of the world, as some final details on an exemption are yet to be worked out.
The value of its shares has risen by 409,825% since its market debut in 1999.
Its status has been cemented thanks to the rush for AI technology – suffering several wobbles along the way – but nothing significant when you refer to the percentage rise of the past 26 years.
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The most recent pressures have come from the emergence of the low-cost chatbot DeepSeek and concerns for global AI demand as a result of Donald Trump’s trade war hitting growth.
Financial markets have been taking a more risk-on approach to the trade war since the delays to “liberation day” tariffs in April.
It’s explained by a market trend that’s become known as the TACO trade: Trump always chickens out.
Image: The milestone is reported by Sky’s US partner CNBC, seen on screens at the New York Stock Exchange. Pic: Reuters
It has helped US stock markets post new record highs in recent days.
The wave of optimism is down to the fact that the president is yet to follow through with the worst of his threatened tariffs on trading partners.
Corporations are also yet to report big hits to their earnings – a fact that is also propping up demand for shares.
If Mr Trump does go all-out in his trade war, as he has now threatened from 1 August, then that $4trn market value for Nvidia – and wider stock markets – could be short-lived, at least in the short term.
But market analysts believe Nvidia’s value has further to go.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, said of its meteoric rise: “Once known for powering video games, NVIDIA has transformed into a foundational player in AI infrastructure.
“Its high-performance chips now drive everything from natural language processing to robotics, making them essential to training and deploying advanced AI models.
“Beyond hardware, its full-stack ecosystem – including software platforms and developer tools – helps companies scale AI quickly and efficiently. This end-to-end approach has positioned Nvidia as a cornerstone in a market where speed, scalability, and efficiency are critical.”
He added: “The key question is where it goes from here, and while it might seem strange for a company that’s just passed the $4trn mark, Nvidia still looks attractive.
“Growth is expected to slow, and it’s likely to lose some market share as competition and custom solutions ramp up. But trading at a relatively modest 32 times expected earnings, and over 50% top-line growth forecast this year, there’s still an attractive opportunity ahead.
“For investors, it remains a compelling way to gain exposure to the AI boom – not just as a participant, but as one of its architects.”