This British shopping startup raised $11 million in February - now it's shutting down

London startup Shopa was meant to change the way people shop for clothes online. It wanted to turn shopping into a social media activity, which rewarded users with discounts on items if they posted items to the app. 

But now, just months after the company raised $11 million (£6.9 million) in funding, Shopa is reportedly winding down. Its CEO is out, staff are leaving, and there are rumours that the money is gone.

What is Shopa?

Shopa was founded in 2012, and aimed to shake up the way people buy things online. It started off with a B2B marketplace, but expanded to a consumer-facing app. 

Users were able to share items as posts, just like a social network. But there was a twist: If you shared an item that your friend went on to buy, then you'd be rewarded with a discount.

The company raised an $11 million Series A funding round in February from Octopus Investments and Notion Capital. That brought the total amount of funding raised to $12.4 million (£7.8 million), including money from angel investors and Shopa's seed round. Shopa wasn't a quiet success, either. It was named "European startup of the year 2013" by IBM.

But despite raising millions, it appears that Shopa is in trouble. CEO Peter Janes has left the company, according to documents filed with Companies House.

He has also removed references to Shopa from his Twitter profile, instead describing himself as an "Entrepreneur. Founder. Speaker. Sports Fan."

Janes did not respond to requests for comment.

Janes shared this inspirational Instagram post with the caption "Never Quit" on August 6, the day he left Shopa:

A report on Unquote.com claims that Shopa is preparing to wind down its business after it faced "many problems" and "alleged management unrest."

Luke Hakes is a technology investor at Octopus Investments, one of the two VC funds that took part in Shopa's Series A funding round. He's also on the board of Shopa. He provided this statement to Business Insider:

At Octopus we understand how hard it is to build a business and how the margin between success and failure is often very fine. We are pleased to have had the opportunity to work with a very talented and dedicated team. The business is going through a challenging period and we are working hard to explore all options available at this time.

Business Insider understands that multiple Shopa developers have left the company, and others are preparing to leave. The company had grown to 32 staff members in its King's Cross office, but many of them have left. Notable departures include Shopa CTO James Neville who left the company earlier this month, and social media manager Gemma Owen who departed in July. Shopa used to send several tweets a day, but its Twitter profile hasn't been updated since August 10.

The company did not respond to requests for comment.

One former contractor reviewed Shopa on company and salary review site Glassdoor. Glassdoor isn't a verifiable source, but it can give an indication of what upset people involved with the company. Here's the review:

The company, in a lot of ways, is still trying to figure out what product to build. This leads to massive amount of anxiety and ambiguity as no one knows inside the company what they are building. - There is a lot of unspoken strife between the technical implementation and sales teams - Engineers and Sales team running around as headless chickens. - Although the company promotes a 'flat' organization, company is riddled with politics.

Shopa used celebrities to promote its website

Maintaining a high profile was seen as a top priority by Shopa's management. It held a launch party in March which was attended by model Pixie Geldof, singers Hatty Keane and Farah Sattaur, "Made In Chelsea" star Alik Alfus, and "The Only Way Is Essex" personality Lauren Goodger. Shopa's CEO gave a speech about his site, and there were iPads on hand so that guests could try it out.

The company tried as recently as August 11 to make a buzz using a celebrity. "Made In Chelsea" star Oliver Proudlock tweeted a photo that appeared to be part of a campaign with Shopa designed to encourage his fans to use a branded hashtag to share their selfies. Nobody else posted their own selfie using the hashtag.

There were ambitious plans to expand overseas

As well as using celebrities to expand in the UK, Shopa planned to expand overseas. Shopa's CEO told Business Insider in March that Shopa was opening multiple offices in the US, and was also looking to expand to China and India. "These marketplaces are massive for e-commerce; a lot of our revenue, we expect, will come from here," he said.

Janes did travel to China in September with a view to establishing Shopa's operations in the country, but there's little evidence that Shopa hired any staff outside of London.