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Why did Hubba Fail?

What Happened To Hubba & Why Did It Fail?

January 24, 2025

Hubba was a Canadian e-commerce startup that aimed to connect brands with retailers through a product discovery platform. Founded in 2012, it initially thrived, raising over $60 million in venture capital. However, internal conflicts, strategic pivots, and the COVID-19 pandemic led to its closure in February 2021.

What Was Hubba?

Hubba

Hubba's main product was a software platform designed to connect independent retailers and emerging brands with buyers. Its unique value proposition lay in streamlining product information management and facilitating direct orders. Notable achievements include raising over $60 million in venture capital and being recognized as one of Toronto's hottest startups.

What Happened to Hubba?

The story of Hubba's rise and fall is a complex narrative marked by several pivotal moments:

  • Initial Success and Ambitions: Hubba was founded with the goal of connecting independent retailers and emerging brands with buyers. The company quickly gained traction, raising over $60 million in venture capital and setting ambitious goals, including a potential IPO by 2020.
  • Leadership Changes and Internal Conflicts: Starting in 2018, Hubba faced significant internal challenges, including the loss of key executives like the chief technology officer and chief marketing officer. These leadership changes contributed to strategic pivots and internal conflicts that destabilized the company.
  • Financial Struggles: Despite its early success, Hubba encountered financial difficulties that led to multiple rounds of layoffs. The impact of the COVID-19 pandemic on small businesses, which were a significant part of Hubba's customer base, further exacerbated these financial woes.
  • Strategic Pivots: In an attempt to adapt, Hubba shifted its focus from enterprise clients to independent retailers. However, this strategic pivot did not yield the desired results and contributed to a decline in user engagement.
  • Closure and Legacy: Ultimately, Hubba decided to shut down operations in February 2021. Despite its closure, the company left a positive impact on the tech community, particularly through initiatives promoting diversity and supporting local causes.

When Did Hubba Shut Down?

Hubba officially shut down operations in February 2021. The decision to wind down the company was communicated to investors and employees around that time, marking the end of its journey in the retail tech space.

Why Did Hubba Shut Down?

  1. Leadership Instability: Hubba faced significant leadership challenges, including the departure of key executives like the chief technology officer and chief marketing officer in 2018. These changes led to internal conflicts and destabilized the company, making it difficult to maintain a cohesive strategy and vision.
  2. Strategic Missteps: In an attempt to adapt, Hubba shifted its focus from enterprise clients to independent retailers. This pivot did not yield the desired results and contributed to a decline in user engagement. The strategic shift was not executed effectively, leading to further financial struggles.
  3. Financial Struggles: Despite raising over $60 million in venture capital, Hubba encountered financial difficulties that led to multiple rounds of layoffs. The company reduced its headcount by almost half, which further strained its operations and ability to innovate.
  4. Pandemic Impact: The COVID-19 pandemic had a severe impact on Hubba's customer base, which consisted largely of small businesses. The pandemic exacerbated existing financial woes and reduced the company's revenue, making it unsustainable to continue operations.
  5. Internal Conflicts: A reported months-long battle between CEO Ben Zifkin and the board of directors regarding the company's viability created a toxic environment. These internal conflicts hindered decision-making processes and contributed to the eventual shutdown of the company.

Lessons Learned from Hubba's Failure

  • Leadership Stability: Ensure consistent and stable leadership to maintain a cohesive strategy and vision, avoiding internal conflicts that can destabilize the company.
  • Effective Strategic Pivots: Execute strategic shifts carefully and ensure they align with market needs to avoid declines in user engagement and financial struggles.
  • Financial Prudence: Manage venture capital wisely and maintain a sustainable financial model to withstand economic downturns and unexpected challenges.
  • Adaptability: Be prepared to adapt to external factors like pandemics, ensuring your business model can withstand significant market disruptions.
  • Internal Harmony: Foster a collaborative environment between executives and the board to facilitate effective decision-making and avoid toxic conflicts.
  • Customer Focus: Understand and prioritize the needs of your customer base to ensure your product remains relevant and valuable.
  • Innovation: Continuously innovate and adapt to stay ahead of competitors and meet evolving market demands.

We Shut Down Startups

Hubba's journey underscores the complexities and challenges that startups face, from leadership instability to financial struggles. If you're navigating similar turbulent waters, Sunset can help you manage the legal, tax, and operational burdens of winding down your startup.

Don't let the stress of shutting down overwhelm you. Book a demo with Sunset today and move on to your next venture with confidence.