Co-op and condo boards with commercial spaces in their buildings have spent the past two years scrambling to cover revenue shortfalls when their commercial tenants' businesses suffered from the COVID-19 pandemic. Now a Chelsea condo has lost a commercial tenant for a very different reason: the sanctions against Russia for its invasion of Ukraine.
Buyk, a Russian-funded grocery app that promised to deliver groceries in 15 minutes, was scheduled to move into a commercial space in the condo building at 150 W. 26th St. in Chelsea. Buyk had already hired an architect and engineer to draw up renovation plans. But then the company's funding source, Sberbank, was sanctioned by the US government as part of the sweeping international campaign to punish Russia for its brutal invasion, the New York Post reports. Buyk responded to the sudden loss of funding by furloughing 650 staff in New York and Chicago — including Buyk’s CEO, James Walker.
In a related development, Bloomberg reports that another grocery app startup with Russian ties, Fridge No More, has gone belly-up. But Fridge No More's problems appeared to precede Russia’s invasion of Ukraine and the ensuing sanctions and restrictions on the flow of funds. Fridge No More had been in talks with DoorDash to buy some of its business, but when those talks fell through, Fridge No More executives decided to shut down the business. “Investors were concerned about growing competition and about bad order economics, i.e. each order brings losses to the company,” Fridge No More chief executive Pavel Danilov told employees in a Slack message reviewed by Bloomberg. This business wasn't a victim of sanctions; it was a victim of cut-throat competition in the city's grocery-delivery ecosystem.
Danilov is from Russia, and the company’s investors include Altair Capital, a venture capital fund led by investor Igor Ryabenkiy that has operations in Russia, the U.S. and Israel.
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