I suspect the problem was the rate of growth was too slow and too expensive. Inherently they had a chicken and egg problem, which is true of many platforms. Customers need vendors/shops that support the platform before it is of use to them and vendors/shops need customers with app.
Signing up vendors time consuming, such that it is a significant cost. Additionally, the payback time is most likely very slow. Visa charges around 2% on a transaction, so they’d need £25m of transactions to pay for a £500k wage bill. It seemed that droplet wasn’t even charging a commission, so it’s unclear how much they were bringing in, probably less.
@SylarRuby Most likely droplet wasn’t profitable. Companies shutdown usually because they can’t get profitabe before they run out of money. Scalable businesses are about how easy it is for you to grow, e.g. you spend $1000 on adverts and you get $2000 in gross margin, so you keep repeating that as fast as possible till it stops working. Whether you need thousands or millions of customers, to break even, depends on the revenue/margin per customer, i.e. if you have a very low margin product (e.g. based on advertising), you need millions of users, if you can charge real money e.g. £100/user/year you might only need 1,000 customers.