// STARTUP COMPARISON
Merama (2023 crisis) vs Debenhams
Merama (2023 crisis) failed in 2023 due to Bad Timing. Debenhams failed in 2021 due to Competition. Different causes, different sectors, different eras — but the same simulation outcome.
| METRIC | 🔥 Merama (2023 crisis) | 🔥 Debenhams |
|---|---|---|
| Sector | Ecommerce | Ecommerce |
| Country | Mexico | UK |
| Founded | 2020 | 1778 |
| Died | 2023 | 2021 |
| Raised | $760M | Public company |
| Peak | $760M raised | £2.9B revenue · 166 stores |
| Primary Cause | Bad Timing | Competition |
// WHY EACH FAILED
🔥 Merama (2023 crisis)
Bad Timing
Merama raised $760M to acquire and scale Latin American e-commerce brands — the same model as Thrasio in the US. When interest rates rose in 2022-2023, the leveraged acquisition model became unprofitable globally. Thrasio filed for bankruptcy. Merama laid off significant portions of its workforce and pivoted from acquisition to software services for existing brands in 2023.
// LESSON
Copying a US venture model in Latin America carries an additional risk: when the US model breaks due to macro conditions, the LatAm version breaks simultaneously with less capital to absorb the shock.
Copying a US venture model in Latin America carries an additional risk: when the US model breaks due to macro conditions, the LatAm version breaks simultaneously with less capital to absorb the shock.
🔥 Debenhams
Competition
Debenhams entered administration in April 2019, was rescued, entered administration again in December 2020, and closed all 166 stores in May 2021. A combination of online retail competition, £600M in private equity debt loading, and COVID-19 lockdowns destroyed the business over a decade.
// LESSON
Private equity debt loading on a structurally declining business accelerates the inevitable. Debt amplifies both upside and downside. On the way down, it is a death sentence.
Private equity debt loading on a structurally declining business accelerates the inevitable. Debt amplifies both upside and downside. On the way down, it is a death sentence.
// EXPLORE FURTHER