Gousto, the food delivery service backed by Joe Wicks, the celebrity fitness instructor, has become embroiled in a bitter corporate governance row after excluding long-standing investors from a deeply discounted share sale.
Sky News can exclusively reveal that Gousto slashed its valuation from $1.7bn (£1.4bn) just over a year ago to less than $300m (£250m) last month when it secured £50m of new funding from some of its biggest shareholders.
The fall in valuation represented a cut of about 80% in 13 months, according to insiders.
Gousto has also secured another £20m in debt financing as part of its efforts to shore up its balance sheet, according to insiders.
While steeply discounted capital-raisings have become commonplace during the technology downturn of the past year, Gousto's decision to shun investors holding just under 10% of its shares has sparked uproar.
The row has prompted several smaller shareholders to lodge complaints with the company's board, which is independently chaired by Katherine Garrett-Cox, the former Alliance Trust chief executive.
Ms Garrett-Cox was hired in 2021 to bolster Gousto's corporate governance standards as it seemingly headed towards a stock market flotation.
The meal-kit delivery company was founded in 2012 by Timo Boldt and James Carter, two former investment bankers, with the former winning the accountancy firm EY's prestigious Entrepreneur of the Year award in 2022.
Mr Boldt quit his job at the age of 26 to set up the company.
Gousto sells subscriptions to recipe boxes and markets itself as offering healthy meals at value-for-money prices, with Mr Boldt describing the company's ambition to become "the UK's most-loved way to eat dinner".
It has attained B Corporation status, which is awarded to businesses with strong ethical or environmental credentials.
One investor questioned whether its B Corp certification was in keeping with its treatment of small shareholders, some of whom have backed Gousto since its earliest days.
A $150m fundraising in January 2022, led by the giant SoftBank Vision Fund 2, cemented the company's "unicorn" status - referring to start-ups worth $1bn or more - and paved the way for some investors to reduce their holdings in a separate secondary share sale.
The SoftBank fund is not thought to have participated in the latest capital-raise.
It invested at a significant premium to the valuation that saw Gousto become a unicorn in November 2020, meaning it is now sitting on a huge paper loss on its stake.
Gousto's other major shareholders include Unilever's ventures arm, Fidelity International, the railways pension scheme Railpen and Grosvenor Food & AgTech, an arm of the Duke of Westminster's vast business portfolio.
A number of institutions which are not currently shareholders in Gousto were, however, also approached about the so-called open offer of shares, according to one insider.
The decision to gauge the appetite of a number of prospective new investors has further angered the existing shareholders who were excluded from the process.
One investor said this weekend: "Gousto is a great business and Timo has been a great founder/CEO, but clearly something has gone wrong in the last year, and people don't see the company taking action to resolve this.
"And then the company and big shareholders do this significantly discounted fundraise as an 'open' offer but does not offer it to all shareholders.
"Why would the board vote not to offer to all shareholders and why would these big funds treat their fellow investors like this? Are they doing this across all their investments?"
A spokesman for Gousto declined to answer questions about the capital-raise other than insisting that the open offer had been extended to over 90% of the company's investor base.
The row at Gousto raises wider questions about shareholder rights at large private companies, particularly those which have gone through multiple rounds of funding.
While Gousto is not in any immediate financial difficulty, it told shareholders that the latest £50m was designed to steer it through more volatile economic conditions.
The governance row in which it has become embroiled has also prompted questions about the role of Ms Garrett-Cox and Gousto's other independent board members.
The former Alliance Trust chief was forced out of that post following a battle with the activist fund Elliott Advisors.
This weekend, Ms Garrett-Cox declined a request to speak to Sky News.
Sky News revealed last month that the company had slashed its workforce by 14% and taken an axe to its ambitious hiring plans.
A person close to Gousto said the redundancy round equated to fewer than 100 employees, implying that its announcement in 2020 that it would create 1,000 new jobs by the end of 2022 had failed to bear fruit.
The job cuts reflected the chill in investor and management sentiment towards technology-focused companies' growth prospects in 2023, even as economic data suggests that any UK recession may be shallower than feared.
Prior to the latest funding round, Gousto secured $150m of new capital in January 2022, which was followed weeks later by a $230m secondary share placing.
It benefited from a surge in demand during the pandemic, and had said it aimed to double its workforce to 2,000 and open two further distribution warehouses.
In its 2020 financial year, Gousto saw revenue more than double to £189m, up from £83m during the prior 12 months.
It also reported underlying earnings before interest, tax, depreciation, and amortisation in 2020 of £18.2m, against a loss of £9m in 2019.
Bankers at Rothschild were retained some time ago to work on a flotation, although that is now unlikely to take place for several years.