Federation Asset Management, the private equity group behind the now-defunct delivery start-up Sendle, has attributed the company’s collapse to misleading financial information provided by a US-based shipping partner. Following a board decision on March 2, 2024, to cease operations, Sendle has officially shut down just five months after merging with ACI Logistix and FirstMile to create the Fast Group.
The merger, initially seen as a strategic growth opportunity, has turned problematic. In a statement, Federation indicated that ACI Logistix had not met its financial obligations at the time of the merger, contradicting assurances given during the due diligence process. This lack of compliance has reportedly harmed the merged entity’s operational performance, particularly affecting supplier relationships.
Founded in 1965, ACI Logistix has long provided shipping and delivery solutions for businesses. Federation believed the merger would enhance its investment in Sendle, subsequently underwriting an additional $12 million in working capital shortly after the deal was finalized. Reports suggest that the private equity firm was also exploring options for up to $60 million in debt to stabilize the business, which included significant management changes in anticipation of improved performance.
In a message to investors on March 5, Federation explained its commitment to recovering funds amid the company’s closure. Prior to the merger, Sendle had successfully raised over $100 million through various funding rounds, attracting notable investors such as Touch Ventures and King River Capital. The merger resulted in these holdings being transitioned into a passive entity under Federation’s management, which took a board seat at Fast Group.
Once marketed as a carbon-neutral alternative to Australia Post, Sendle developed technology enabling small and medium-sized businesses to efficiently connect their online platforms with courier services. On March 3, Sendle notified its customers that all pending parcel pick-ups had been cancelled, marking a somber end to a venture that aimed to disrupt the Australian delivery market.
As the fallout from this merger unfolds, the implications for investors and the broader logistics sector remain significant.
