Snap, an innovative intercity bus operator, has announced a “temporary pause in operations” while talks with its backers continue.
The business model involves using spare capacity from local coach companies to run long-distance services, mainly to and from London.
Its slogan promises a trip from “A to B like a VIP” for fares as low as £5, with demand aggregated and trips operated only when there are enough passengers.
Passengers register their interest in travelling on a particular route on a specific date on their smartphones.
Since Snap began running coaches between Nottingham and London in 2016, it has carried 220,000 passengers.
At the end of service on Monday 17 June, services will stop and booked passengers will be given full refunds.
The firm’s founder and chief executive, Thomas Ableman, said he hoped operations would resume in September
Since its launch in October 2016, Snap has been financed by venture capital funding markets.
It raised additional funds in September 2017. Another investment round, which began in January 2019, has not yet closed.
While some individual routes have been “cash positive”, Snap is loss-making as a whole.
Mr Ableman said: ”This is not an unusual model for businesses such as Snap that have a central tech development overhead.”
“Despite strong support from our largest investor, we still need to close a deal with new co-investors to ensure we have sufficient growth capital for future cities.
“Many businesses at this stage would keep quiet, carry on fundraising in the background and not reveal there was a problem until they went bust. That is not the kind of company I have set out to lead.
“All our operators will receive full payment for trips run and will be offered payment equal to the profits they would have earned for future contracted trips.”