VC Smoke and Mirrors — Who Backed the Failure, and Why?
In the wake of Huboo Technologies Limited’s dramatic collapse, attention naturally turned to those who managed it. But equally pressing is the question: who funded it?
This post explores the venture capital and private equity firms that stood behind Huboo as it racked up over £65 million in losses across three years — and asks: what were they thinking?
1. The VC Roll Call
Huboo raised more than £118 million in equity funding between 2019 and 2023. Some of the key backers included:
- Baaj Capital – Led by Jaswinder and Dalwinder Singh
- Atalla Capital (now AB Capital) – Private equity firm tied to other distressed companies
- Triple Point Investment Management – Provider of secured loans to Huboo
- Episode 1 Ventures – An early-stage VC focused on UK startups
These were not small players. They had board representation, access to detailed internal data, and, one would assume, a strong say in strategic direction.
2. Red Flags Were Everywhere
From 2020 to 2022, Huboo’s annual accounts filed at Companies House showed the following:
- 2020: £4.2M turnover | £3.5M loss
- 2021: £13.8M turnover | £13.3M loss
- 2022: £17.7M turnover | £47.1M loss
Despite this worsening trajectory, funding rounds continued. Why? Were these firms ignoring the losses in favour of topline growth metrics?
3. Misplaced Optimism or Strategic Blindness?
There are two likely explanations for this relentless investment:
- Fear of Missing Out (FOMO) – The ecommerce boom during the pandemic drove many VCs to bet heavily on fulfilment startups.
- Confirmation Bias – Once they’d invested, firms were more likely to double down rather than admit an error in judgment.
Unfortunately, this blinded them to fundamental flaws in Huboo’s unit economics and operational capabilities.
4. The Debt Side: Secured Lending as Safety Net
Firms like Triple Point structured their involvement more cautiously, offering secured debt rather than equity. Their loans were backed by Huboo’s assets — allowing them to recoup value even in administration.
But this raises questions about fairness: Were unsecured creditors misled into thinking the company was stable? Did investors have privileged insight unavailable to clients and suppliers?
5. The Role of Baaj and Atalla
Baaj Capital and Atalla Capital (now AB Capital) were not only financial backers — they were central architects of Huboo’s strategy.
They had directorships, ownership stakes, and, in the case of Baaj, control over other struggling companies like Bodycare. Their pattern of buying, bleeding, and rebranding businesses is increasingly visible.
6. No Accountability, No Reform
To date, none of these firms have publicly accepted responsibility. No formal investigations have been launched. And the same names reappear in new ventures, with no regulatory repercussions.
Is it time to re-evaluate the role VCs play in startup collapses? Should they be held more accountable when companies they fund implode?
Conclusion: The Illusion of Intelligent Capital
Huboo’s collapse wasn’t just a failure of operations — it was a failure of capital stewardship. The people who funded it had the data, the power, and the opportunity to intervene. Instead, they chose growth theatre over sustainability.
The result? Suppliers unpaid. Employees laid off. Clients abandoned.
Next: A Closer Look at Bodycare — Another Business Bled Dry?
