// STARTUP COMPARISON
Merqueo vs Debenhams
Merqueo failed in 2023 due to Unit Economics. Debenhams failed in 2021 due to Competition. Different causes, different sectors, different eras — but the same simulation outcome.
| METRIC | 🔥 Merqueo | 🔥 Debenhams |
|---|---|---|
| Sector | Ecommerce | Ecommerce |
| Country | Colombia | UK |
| Founded | 2017 | 1778 |
| Died | 2023 | 2021 |
| Raised | $50M | Public company |
| Peak | $50M raised | £2.9B revenue · 166 stores |
| Primary Cause | Unit Economics | Competition |
// WHY EACH FAILED
🔥 Merqueo
Unit Economics
Merqueo built an online grocery delivery service operating in Colombia, Brazil, and Mexico. After raising $50M it expanded aggressively to three countries before achieving sustainable unit economics in its home market. Delivery costs, high perishable inventory waste, and low average order values in the Colombian market made scaling unprofitable. Merqueo shut down Colombian operations in 2023.
// LESSON
Online grocery requires a minimum basket size to cover delivery economics. If your target market's average household grocery spend doesn't support the required basket, the model doesn't work regardless of execution quality.
Online grocery requires a minimum basket size to cover delivery economics. If your target market's average household grocery spend doesn't support the required basket, the model doesn't work regardless of execution quality.
🔥 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