Online grocery business Supie has gone out of business after being placed in voluntary administration.

The Auckland-based grocer was placed into administration by its sole director after a key investor stopped funding the business, which began as a start-up two-and-a-half years ago.

PWC voluntary administrator Richard Nacey says the company, which employed 120 people, has run out of cash.

The grocer was set up to introduce more competition into the grocery industry but struggled to achieve the scale necessary to be competitive and profitable.

Earlier this year, it said it was under pressure from suppliers to raise its prices.