WICKER PARK — A grocery delivery company which expanded to Chicago late last year has temporarily closed after leaders said sanctions from Russia led to its major funding sources being cut off.
Buyk, a New York City-based startup that provides express grocery delivery by bike, opened seven Chicago locations in late 2021 and early 2022. Couriers package items from the stores, which are not open to the public but are stocked with food from local and national vendors.
Buyk promises free delivery of groceries on the North Side and part of the Southwest Side near Midway Airport, according to the company’s website. In December, the company announced plans to open 14 more stores across the city by spring.
But Buyk furloughed about 98 percent of its employees Friday, a spokesperson said. The company’s CEO said Russia’s recent crackdowns on the United States over its feud over Ukraine interfered with Buyk’s ability to receive funds from its Russian founders, Slava Bocharov and Rodion Shishkov. The pair co-founded Samokat, a delivery service based in St. Petersburg, Russia.
“Our founders Slava Bocharov and Rodion Shishkov have been providing bridge financing to Buyk until we close our next investment round. However, the restrictions [Russian President Vladimir] Putin has imposed in response to U.S. sanctions have made this bridge financing setup untenable, despite neither of our founders being sanctioned,” Buyk CEO James Walker said in a statement.
Walker said all of Buyk’s operations are based in the United States, and leaders had to make the tough decision to furlough workers “until we are able to secure more funding sources in the U.S.” About 98% of workers are furloughed, he said.
“As we begin to raise additional capital to fund our future growth, we have been very much focused on moving all our funding to the U.S.,” Walker said.
One Chicago-based Buyk bike courier, who asked to remain anonymous, said employees had joked over the past week their jobs could be impacted by sanctions levied against Russia. But there were no signs of any issues until employees were sent home early Friday after being told the company was experiencing tech issues, the courier said.
Later that day, the courier received a message from a Buyk manager in a work group chat alerting employees they’d been furloughed.
“The entire U.S. market will be furloughed for the next month,” read the message, which was reviewed by Block Club. “We all are laid off until the company gets US American funding hoping to do that within next month or sooner but that’s a big if.”
The courier said she expects to be paid in the next few days for the remaining hours she worked last week.
“We have been told that by this coming Friday, we will be paid for the previous week that we worked, and that their estimate for how long this is going to go on for is around a month,” the courier said.
The furloughs come just weeks after neighbors in Logan Square complained Buyk was throwing out fresh produce and other unopened groceries at its Logan Square warehouse, 2774 N. Milwaukee Ave.
The controversy led Ukrainian Village resident Jim Humay to partner with the company for bi-weekly food pickups to distribute food to community refrigerators in the area. The refrigerators are on sidewalks and the food inside is free to the public.
“This presented a good opportunity to help out the community, to solve a problem that the business had with leftover food and solve a problem the community had with not having food,” Humay said last month.
Humay said he completed two pickups from Buyk on Sunday and Monday and hopes the company will resume operations as soon as possible.
“It just goes to show how events halfway around the world can impact us here at home so immediately. So, I’m certainly disappointed that those locations are shut down and certainly feel for the the employees there,” he said.
Humay is looking for other ways to source food for the neighborhood fridges. Anyone with ideas can reach out to him on Facebook.
“I’m hoping that we can find other stores or businesses to partner with in the immediate future to continue to take care of those needs,” he said.
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