So-called “geek gear” subscription box seller Loot Crate, an early leader in the now red-hot category, has filed for Chapter 11 bankruptcy protection and has a buyer in the wings as cash runs low, according to various media reports.
The company has about 250,000 subscribers according to a court filing in Delaware, Bloomberg reports, but hasn’t shipped $20 million worth of goods and has $30 million in debt.
The company has about 60 employees after laying off 50 last week and hopes to sell itself quickly during the bankruptcy process, according to Bloomberg.
Loot Crate was co-founded in 2012 by Christopher Davis, who owns a stake of just over 50%, according to the LA Times. It was flying high and winning accolades as a bottle rocket startup until 2017 when it defaulted on a loan but then refinanced.
Loot Crate said in a release it has received a commitment for up to $10 million in new financing from Money Chest LLC, one of its investors, which combined with subscription revenue will fund ongoing operations. Money Chest is connected to a major collectible manufacturer and distributor, a restructuring officer for Loot Crate told the LA Times.
“During the sale process we will have the financial resources to purchase the goods and services necessary to fulfill our Looters’ needs and continue the high-quality service and support they have come to expect from the Loot Crate team,” Davis said in a statement.