SF startup Fuzzy abruptly shuts down, employees left in the dark

Fuzzy Pet Health, a San Francisco-based veterinary care telehealth startup, has abruptly shut down, leaving employees and customers in the lurch.

The 7-year-old startup’s top executives, Eric Palm and Zubin Bhettay, told staff Thursday evening of last week that Fuzzy would be laying off employees Friday and “winding down its operations” in an email obtained by SFGATE. Now, the company’s website is down and Facebook page is closed. Former employees said they did not receive their paycheck due late last week, the firm has not been providing medical insurance since June 1 and 401(k) deductions from recent paychecks have not shown up in their accounts.

Several former employees posted about the shutdown on LinkedIn late last week. SFGATE confirmed the authenticity of the closure email from Palm and Bhettay with five former Fuzzy employees, four of whom were granted anonymity in accordance with Hearst’s ethics policy.

Since the collapse of Silicon Valley Bank in mid-March, which affected a slew of other financial companies, employees said Fuzzy had been paying its full-time employees through wire transfers — but the employees said they haven’t received a paycheck since the end of May. Employees said they learned that something was wrong with the company’s insurance plan at the beginning of June when co-workers began to have their flexible spending account cards declined at doctors’ offices. Workers also allege that 401(k) deductions made on their paychecks have not been reflected in their personal accounts.

The company seems to have done its best to keep operating as usual, employees said. As workers struggled to get answers about payroll and insurance issues from top brass, the firm continued to work on new hiring; Fuzzy extended a candidate an offer the day of Palm and Bhettay’s email, employees said.

The startup, which has raised $80 million since its founding in 2016, aims to bring the booming telehealth model to pet care, providing pet owners with 24/7 live chat and veterinarian-guided training and shopping options. Customers could subscribe for monthly or annual memberships and get their pets’ medications delivered.

Palm, in a February Zoom recording shared by a former employee with SFGATE, said the company was seeing steady prescription and membership growth to start off the year. “I’m super excited about our opportunity, and I’m super excited about what people want from us,” the co-founder said in the call. “… Thank you all. Keep it up, and we’re going to do big things.”

But four months later, the firm appears to have completely shuttered. Palm and Bhettay, the company’s co-founders, did not respond to requests for comment by SFGATE. Bhettay appears to have deactivated his Twitter and LinkedIn accounts. Investors at Icon Ventures and Greycroft — which put funding into the company — also did not respond to messages from SFGATE.

Krishna Somanathan, who worked at Fuzzy as an independent contractor from India, said that Palm and Bhettay’s email unexpectedly arrived during their shift on Thursday evening, US time.

“I had just completed a chat assisting a member to get a refill on one of the medications,” Somanathan told SFGATE in an email. “I ended the chat assuring her that we would be there for her and her pets 24/7. However, within the next hour, the company was shut down.”

Hear of anything happening at Fuzzy? Contact tech reporter Stephen Council securely at [email protected] or on Signal at 628-204-5452.


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