NEW YORK (BLOOMBERG) - Customer complaints about British travel start-up Pollen poured in so quickly that employees could not keep up.
Over the last year, it was forced to cancel dozens of its luxury events, many featuring A-list musicians at posh beachfront locales, blaming the Omicron variant of Covid-19. Pollen resorted to a slapdash triage system to handle refund requests: a spreadsheet that prioritised people who complained the loudest on social media.
"How can you still have the audacity to run more events (without) paying previous cancelled events refunds?" Pollen customer Zahra Ali wrote on Twitter. "Absolute jokes. Robbing people, it's disgusting."
Cancellations, along with other pressures, caught up with Pollen last week, when its London-based owner StreetTeam Software said it had hired Kroll LLC to handle a break-up and sale of its disparate businesses. It cited Covid-19 restrictions, the global economic downturn and bearish sentiment among venture investors, which combined to "put too much pressure on the business whilst at a critical stage of a start-up's maturity".
But Pollen's troubles extend far beyond Covid-19 lockdowns and antsy funders. Interviews with 16 people, including former employees, describe a start-up derailed by missteps including unrealistic growth projections, misleading communication with customers, lavish employee perks and unmet financial obligations to departing workers.
Founded in 2014 by Mr Callum Negus-Fancey and his brother Liam, a pair of British entrepreneurs, Pollen boasted that it has raised more than US$200 million (S$277.6 million) from investors. The company works with promoters and music festivals to plan travel experiences, such as a four-day music festival in Malta headlined by American rapper 50 Cent, or a two-day wilderness experience in the Alps led by a former special forces sniper.
As Covid-19 lockdowns loosened and travellers began venturing out last year, the founders had cause for optimism. Pollen said in July it saw a surge in growth in 2021, notching a sales increase of more than 300 per cent compared with pre-pandemic levels. It had lofty goals for this year, too, aiming to generate US$376 million in bookings, according to an internal projection. That would have been a more than threefold increase from 2021.
But Pollen's prospects worsened as Omicron unleashed a cascade of event cancellations, customer complaints and refund demands. Of 360 events put on by Pollen in the last 12 months, 39 were called off, according to Mr Daniel Ritterband, a spokesman for Pollen.
Mr Ritterband said that customers are "triaged and prioritised fairly" when requesting refunds. Pollen aims to fulfil the requests within 90 days, and it has met this target 90 per cent of the time since 2020, he said. Pollen has paid more than US$75 million in refunds since the pandemic began, internal Pollen documents reviewed by Bloomberg show.
Refunds were hardly the only line item boosting costs. As it grew, Pollen spent on employee perks, such as renting England's Osea Island, and flying staff from the United States to a week-long retreat in the redwoods in California in 2019. There was also a partying culture to match the business, employees said. Lock-in events, where Pollen would pause work early for outings such as go-karting, often ended in late nights of drinking, followed by hangovers the following day, employees said.
Pollen's operating loss widened to £53 million (S$87.6 million) on sales of £48 million in 2021, compared with a loss of £40 million the prior year, according to a filing. Meanwhile, operating expenses ballooned to more than £100 million last year compared with £60 million a year earlier. As at the end of last year, the company had sufficient liquidity to meet its financial obligations, according to the filing.
Even so, concerns over the company's financial footing surfaced within weeks of the April fund-raising announcement, when Pollen cut about a third of its staff, or about 200 people. Many of those who lost their jobs are still awaiting severance pay, according to former employees
Many remaining Pollen employees based in Britain have lost their jobs, Sky News reported on Thursday (Aug 18). Pollen parent StreetTeam informed staff that "only a handful" would remain, the news service reported.
