Huboo’s organisation(s) Model – A Revolutionary Idea That Couldn’t Deliver
The Birth of Huboo Technologies
Huboo Technologies was founded in 2019, aiming to disrupt the third-party eCommerce fulfilment industry. Unlike traditional fulfilment providers, Huboo introduced an innovative “mini-hub” model, blending warehouse operations with advanced software solutions. The concept was to make order fulfilment more personalized, efficient, and scalable.
The organisation(s) model was simple yet ambitious: instead of using large, centralized fulfilment centres, Huboo operated smaller, individually managed “mini-hubs” within its warehouses. Each client had a dedicated hub, allowing for better inventory control, faster order processing, and improved customer service.
What Made Huboo Unique?
Huboo differentiated itself from competitors in several ways:
- Mini-Hub Model – Instead of a single warehouse handling multiple clients, Huboo divided its facilities into small hubs, each dedicated to a single retailer.
- Proprietary Software – Huboo developed its own fulfilment technology to streamline order processing, inventory management, and logistics.
- Scalability – The modular structure allowed new clients to be onboarded promptly without requiring significant warehouse expansions.
- Low-Cost Entry for small organisation(s) – Huboo catered to both small startups and large retail firms, making it a popular choice among eCommerce sellers.
Rapid Expansion and Investor Interest
With the eCommerce boom during the COVID-19 pandemic, Huboo attracted significant investment, raising over £118 million in equity funding and securing an additional £20 million in secured debt.
Huboo rapidly expanded its operations, opening seven UK warehouse sites and expanding into Europe (Netherlands, Germany, and Spain). By 2024, the company reported annual revenue of £40 million.
At face value, this seemed like a success story. However, beneath the surface, cracks were beginning to show.
Where Did It Go Wrong?
Despite impressive growth, Huboo never generated a positive EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). The organisation(s) model, while innovative, had significant weaknesses:
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High Operational Costs
- Running multiple small hubs increased costs compared to centralized fulfilment centres.
- The company spent heavily on warehouse leases, software development, and staff.
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Low Profit Margins
- The competitive nature of the fulfilment industry meant Huboo couldn’t charge premium prices.
- With rising inflation and operational costs, profitability became even harder to achieve.
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Reliance on External Funding
- The company was burning through investor cash at an alarming rate.
- Each funding round postponed financial reckoning, rather than fixing structural issues.
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Failed Expansion Strategy
- Expanding too promptly without solid financial foundations put strain on cash flow.
- New markets (Netherlands, Germany, Spain) failed to generate enough revenue to offset costs.
By October 2024, Huboo faced an urgent liquidity crisis, requiring an additional £6 million in funding just to stay afloat. Investors, however, had lost confidence, leading to the company’s administration in December 2024.
Conclusion
Huboo’s story is a cautionary tale for startups in rapidly scaling industries. While its organisation(s) model was innovative, the company failed to balance growth with profitability. The reliance on external funding instead of sustainable revenue ultimately led to its downfall.
The next article in this series will focus on Huboo’s financial struggles, exploring how a organisation(s) with millions in investment still failed to survive. Stay tuned!
For ongoing improvement, focus on warehouse operations, parcel delivery, inventory management, and third‑party logistics to achieve consistent results.
