Pebble shuts down

 

Pebble, one of the best-known smartwatch brands, is dead. Rumors about the company’s demise have been swirling since The Information reported a potential Fitbit buyout last week. Today in a post on Kickstarter, Pebble confirmed that Fitbit was acquiring “key Pebble assets” and that Pebble would “no longer be operating as in independent company.”

This is completely in line with a Bloomberg report last night that claimed only chunks of Pebble were being sold to Fitbit, namely its intellectual property, software engineers, and testers. Designers and other staff will be let go and current products (and all other assets) are, according to Bloomberg, expected to be sold to pay the shuttering company’s debt.

And that leaves Pebble’s loyal customers out in the cold. While Pebble’s Kickstarter note ends on a happy note of gratitude to its many loyal customers, those customers are, in fact, royally screwed.

“One-to-one Pebble support is no longer available” and “any Pebble currently out in the wild is no longer covered by or eligible for warranty exchange.” This means, no matter when you purchased or received your Pebble device, you are on your own—and if your device dies, you’re simply out a device. Any warranty you might have been promised from Pebble directly is void. (If you didn’t purchase from Pebble, but from a site like Amazon, you may still be able to return the product for cash or store credit.) You can also expect to see zero software support (or updates) going forward, despite Fitbit’s acquisition.

If you took part in Pebble’s recent Kickstarter, which launched on May 24 and raked in nearly 12.8 million dollars, and you have not received your product, then you are, again, screwed. As of today Pebble will no longer be shipping devices. Pebble 2 backers who haven’t received a device won’t receive one. The Time 2, Core, and Time Round, originally intended to ship last month and later scheduled to ship in January 2017, are completely canceled.

Pebble promises those smartwatch-less backers will receive a refund, which is great! They deserve a refund! However those refunds will take place through the Kickstarter system and aren’t expected to be completed until March 2017, nearly a year after many backers dropped their cash on the project.

And that, more than the loss of cool tech and the the honoring of warranties, is the real kick in the pants. Pebble, essentially, bamboozled 12.8 million dollars out of its customers and then sat on that money for the last 6-7 months. Worse the company wasn’t up front about the rumors and its own reported demise, instead leaving backers twisting in the wind for the last week, surreptitiously updating the expected ship dates for products that it had good reason to know it might never be able to ship.

This isn’t just a major blow for the already dying smartwatch market, it’s a blow for crowdfunding in general. Pebble was one of crowdfunding’s most notable successes, and its continued reliance on crowdfunding for each product launch suggested that we were seeing the beginnings of a new kind of business plan, where companies could be supported by their fans rather than angel investors.

If Pebble, one of Kickstarter’s biggest success stories, can fail so spectacularly then why should a consumer put trust in any of the smaller crowdfunding campaigns out there? Just when it was looking like at least some crowdfunding could be trust, Pebble has proven that you jut can’t. Invest in the crowdfunding future at your own risk.

Four Food Startups Shutdown

 

India’s cab aggregator sector is doing well for itself. The same is not the case with the food aggregator sector. Four startups in the hyperlocal food delivery space have reportedly shut down their businesses in the last few months.

Online food delivery startups Cyberchef, Mealhopper and Bite Club have all shut down in quick succession. Foodpost, another startup, lasted barely six months.

All these startups were aggregators that networked with home chefs to deliver food to web or app users.

Cyberchef was founded in 2015 by Neha Puri. It was a virtual marketplace for traditional meals. The most recent to shut down, it apparently had an ugly closure with several home chefs as well as the vendors working with the company alleging it hadn’t cleared their payments.

“I worked with Cyberchef for around eight months and payments were always late. I kept writing to them and suddenly they stopped operations,” said Simran Bagga, a home chef working with the startup.

Bite Club, launched in 2014 by Aushim Krishan and Pratik Agarwal, was a mobile-first food delivery marketplace connecting local chefs to customers. They were backed by growX Ventures and angel investors from India. The startup closed its doors in July after it failed to raise another round of funding.

“The founders of the company communicated to us through a WhatsApp group that due to their failure to raise another round, they are suspending operations,” said Pooja Gulati, a home chef associated with Bite Club. “The owners of Bite Club went bankrupt,” said a person close to the development.

Venture capitalists currently do not see the food aggregator business becoming unviable but they do think that it calls for the revision of its strategy. The major challenges it faces are the need to expand quickly and maintaining a high quality of food and service. These two factors when combined produce a high burnout rate for startups.

Vikram Upadhyaya, founder of a GHV business accelerator said, “As an investor, I am still very bullish about FoodTech. However, I feel maintaining food quality through process standardisation and technology is very important to be successful and that can be challenging in a home chef-based space.”

In May 2016, Gurgaon-based food-tech startup operating in the daily meals segment, Yumist, stopped its services in Bangalore. Recently, restaurants associated with Swiggy and Shadowfax pulled back from having their orders delivered by the startups. They cited a sudden spike of 25% per order as commission charged, as one of the key reasons that led to the severing of the partnership.

Startup operating in Gurugram’s foodtech aggregator space has narrowed itself down with Innerchef and Dabbagul being the only two major players left in the space.

Readability Bookmarking Service Will Shut Down

 

The Readability bookmarking service will shut down on September 30, 2016.

After more than five years of operation, the Readability article bookmarking/read-it-later service will be shutting down after September 30, 2016.

If you’d like to save your bookmarks, please follow these directions before September 30, 2016. You can export your bookmarks by visiting your Tools page, scrolling down to the Data Export section, and clicking the Export Your Data button. You’ll receive an email soon after that contains your bookmarks. Similar services like Instapaper will allow you to import your bookmarks into their service.

The Readability Parser API for developers will continue to be supported and will continue to function as always. We plan to put new energy and focus on the Readability parser, and further announcements will follow. If you’ve requested an API key in the past, you will have received an email with additional details.

Since it launched as a simple bookmarklet in 2009, the Readability project’s impact on reading on the web and beyond is undeniable. We appreciate your loyalty and support for the platform over the years.

AskMe Shuts Down, Thousands Of Employees Laid Off

 

In yet another sad chapter in the Indian startup ecosystem, e-commerce site and consumer internet search platform AskMe has shut down and is in the process of laying off its 4000 odd staff. The reason behind the shut down is being stated as severe cash crunch according to a report in The Economic Times.

While the AskMe.com portal is still live, none of the orders placed there are being accepted. According to sources who have spoken to ET, one of the reasons for the shut down is also being speculated as the unplanned exit of one of its principal investor Astro Holdings.

Astro Holdings, which held a 97 percent stake in AskMe Group exited after making its last cash investment of Rs 150 crore. AskMe had even written to the Ministry of Corporate Affairs and Registrar of Companies to prevent Astro Holdings from leaving without meeting its liabilities and commitments, but it was all in vain.

In recent times, around 650 employees had also resigned from AskMe. The site was formed in 2010 and it launched its online shopping site called AskMeBazaar in 2012 with small and medium enterprises. AskMe is associated with around 12,000 merchants in 70 cities. It also offered next-day delivery.

Recently, Ola also shut down its TaxiForSure division thanks to the latters integration with Ola Micro service. This has lead to around 700 to 1000 people losing their jobs as well, while some employees from TaxiForSure have been absorbed into Ola.

Ola shuts down TaxiForSure

 

OneReceipt is shutting down

 

OneReceipt will be shutting down August 24, 2016. You may not know it, but the OneReceipt team is made up of a very small dedicated and passionate group of engineers who have worked tirelessly to give you a free, intuitive service to organize your purchases. We’re glad you found us and hope our service was valuable.

SpoonRocket Closed, Future Uncertain

 

Sweet potato and black bean chili from SpoonRocket, which has not been in operation for several days. Photo: SpoonRocket

SpoonRocket, the food delivery service headquartered on Ninth St. in West Berkeley, has halted operations. A former employee and a contracted driver were both told by the company over the weekend that the business has closed down for good. No meals have been delivered since Friday, and SpoonRocket’s commercial kitchen, at 1725 University Ave., appears to be shuttered.

Anyone trying to order food for delivery over the weekend or on Monday was met with a notice on the SpoonRocket website that the site was “undergoing maintenance.”

On Sunday, Berkeleyside received an email from a tipster who said a friend, a SpoonRocket employee, had been let go. She was told that by management that SpoonRocket had gone under. Berkeleyside has not been able to confirm this. Several emails sent to SpoonRocket and to its PR representative, beginning on Sunday morning, have not been answered. The company is not answering phone calls.

The SpoonRocket website is showing a notice that it is undergoing maintenance. The food delivery service has not operated for an estimated three days. Image: SpoonRocket

A man who asked not to be named and who has worked as a delivery driver for SpoonRocket on and off since May 2014, was expecting to work this weekend. He said a manager at SpoonRocket told him on a phone call that the company was closing and that he should look for other work. Shortly afterwards, however, he received a text from the same manager saying things had changed and that they might not be closing. The driver said he wondered if the company was preparing an official statement and did not want the news to leak out prematurely.

SpoonRocket was launched in 2013 by UC Berkeley graduates Anson Tsui and Steven Hsiao with a mission to deliver cheap meals to customers rapidly via their smartphones. A typical entrée might cost $6 and be in the customer’s hands in under 10 minutes. Food is delivered by a fleet of contracted drivers whose cars often sport the company’s signature red flag. Drivers keep the food warm in special packaging and then respond to orders via an app and deliver until their supply runs out.

Tsui and Hsiao already had two startups to their names when they started SpoonRocket — Phở Me Now and Munchy Munchy Hippos, both of which came under umbrella company LateNightOption.com.

The Y Combinator-backed SpoonRocket raised $2.5 million in seed money in September 2013, and $11 million in venture capital in May 2014, according to CrunchBase.

In 2014, SpoonRocket expanded from the East Bay to SOMA in San Francisco. It launched in Seattle in February 2015 but shut that service down just four months later in June of that year. It also launched and closed a San Diego operation in 2015.

The food delivery market has bloomed in recent years, making for a highly competitive field. Other companies in the same broad market that operate in the Bay Area include: PostMates, Eat24, Blue Apron, Caviar, Munchery, DoorDash, Instacart, Amazon Fresh, Good Eggs and UberEATS. All deliver prepared food, whether from kitchens, restaurants or grocery stores.

According to the driver, SpoonRocket operates different pay structures for its drivers — who are all independent contractors — depending on the time of day. The breakfast shift pays $11/hour not including tips, with a guaranteed minimum of $15, he said. Lunch and dinner on weekdays pays $2/delivery not including tips. And, on the weekend, drivers earn $6 an hour plus $2.25 per delivery, not including tips.

On Monday, speculation was beginning to be voiced on Twitter, with SpoonRocket fans bemoaning the lack of service and wondering what was going on:

Not least because of its competitive pricing, SpoonRocket has proved popular among the local student population. But SpoonRocket was keen to stress that it had expanded its market beyond its core student market. In 2014, it contacted Berkeleyside Nosh to say it had “come a long way since serving pho and burritos to Cal students at 4 a.m.” It introduced organic and paleo dishes, and other demographics did indeed appreciate the service. Road-testing food delivery services last October on Berkeleyside, Heather Flett, co-founder of parents and kids website 510Families, reported that her “favorite service for the fastest food in town” was SpoonRocket.

Berkeleyside will update this developing story as we source more information.

This.cm shutting down

 

 

 

This

, the awkwardly named share-one-link-per-day platform, is shutting down at the end of the month, founder

Andrew Golis

announced over email to users and

in a Medium post

. The site,

launched in 2014

, had generated

some significant interest among media types

, having been invite-only for most of last year. It opened to everyone last fall and began offering automated,

curated email newsletters

. It recently added a commenting option, and had been exploring sponsorships as well as premium membership options; a new version of its app was

featured in the App Store

just last month, and Golis was

giving it a promotional push

just 10 days ago.

Golis explained in his announcement that the lack of funding and any indication of sustainability prompted the decision:

I’m tempted to make the explanation for that complicated, but it’s pretty simple: we worked ourselves to the point of exhaustion, struggled to raise money and just ran out of time. The site, newsletter and app are beloved by tens of thousands of people, including many of the writers and publishers I most admire. But we never got big enough to raise long-term capital or begin to build a sustainable business.

In the last few weeks and days, we’ve entertained a few very flattering conversations with other companies about bringing our work there. But none have come with the scale of commitment that would allow us to attack this huge opportunity with new energy.

And so we’re going to wrap this up in a way that’s best for our community and our team.

In the coming weeks, we’ll offer This. members a tool to export the links they’ve shared to the site. We’ll send around a list of companies and products and people who are building things we think This. fans should keep an eye on.

And I’ll finally give the mobs of people who have tried to poach them from This. the opportunity to snatch up Zeb Young and Mayukh Sen, our brilliant Directors of Engineering and Editorial.

The site was just last month announced as part of a

class of seven NYC startups in Matter’s accelerator

, and won’t be completing the program. As Golis writes:

In particular, I’m grateful to the folks at Matter VC, the incredible accelerator that has helped us in so many ways. One of our biggest disappointments in the timing of this is that we won’t be able to finish their extraordinary program and work closely with the impressive companies they do so much work to build. I would highly recommend this program to all media entrepreneurs and just wish the timing worked out better for us to take full advantage of this opportunity.

The platform found some market penetration among media types, and a number were distraught at the news, even though the demise of a consciously artisanal sharing platform wasn’t much of a surprise for some.

Six Mistakes Of TinyOwl, The Blue-Eyed Start-Up Child

 

 

TinyOwl, a Mumbai-based food technology start-up, is staring down the barrel of a gun.

The numbers tell the dismal story. Burning through Rs 2.5 crore a month on an average, it was only left with Rs 18 crore at the end of January. In the past 18-odd months, it had raised Rs 152 crore from various marquee investors and has now run out of options.

No investor is keen on funding the company, and no one wants to buy it. So, it has until June for its final hurrah - unless it can get funding or sell.

But how did the blue-eyed child of the start-up ecosystem get here?

The slide started in September 2015 when it fired 300 employees after over-hiring - a common mistake for start-ups.

The cracks were obvious when one of the employees, in her 30s, took a deep breath, composed herself and marched into a cabin, threw open the door and announced herself in a loud voice.

"How much money did you save when you fired me?" she asked Harshvardhan Mandad, the founder and chief executive officer of TinyOwl.

Mandad stared back, followed by moments of silence. "You know what? I don't care and neither do you," she said and marched out.

As the door closed, onlookers say Mandad was back to looking at his phone, as if nothing had happened.

It was one of those rare moments when Mandad was actually in the office. The IIT-B alumnus' primary job is fund raising. Operations, finance, marketing, human resource and technology are the jobs that are split between the other four co-founders - Shikhar Paliwal, Gaurav Choudhary, Tanuj Khandelwal and Saurabh Goyal.

The woman was one of those hired, interviewed personally by Mandad, after the company peaked at 2,500 orders in July 2015. The founders and investors were excited. For context, here's an example: India's biggest food tech brand, Zomato, does about 3,000 orders a day now.

The uncoordinated hiring, and subsequent retrenchment, meant TinyOwl's burn skyrocketed to Rs 8-10 crore a month. The discount game meant most customers kept coming back but there were no loyalties.

Money was running out.

Mandad approached investors from across the world. A few Germans were flown in. Everyone refused. Mandad then started approaching competitors to buy out a portion of the company in October.

Business Standard, at the time, had sent an email asking if the company was on the block. Mandad and Gautam Mago from Sequoia Capital, the company's lead investor, said no.

"Oh yes. Harsh approached everyone he could,'' said a former employee who was part of the "inner circle".

Sequoia, Nexus Venture Partners and Matrix Partners agreed to give the company Rs 52 crore but that was it, they said.

Make it last 12 months, the investors are learnt to have told the company.

TinyOwl had gotten a second lease of life. But how would Rs 50 crore or last 12 months when the burn rate was Rs 10 crore a month?

That is when TinyOwl made its second mistake.

In November 2015, it initiated a second round of cuts. Mandad was advised not to retrench so close to Diwali. But the cuts were announced.

Only the Mumbai and Bengaluru divisions were kept alive. The co-founders were sent to various locations. The hostage drama and the breakdown in the relationships between the employees and the founders are well documented.

Where was Mandad? No one is sure. Through the meltdown, he did not come to work. He communicated only through his phone.

The burn was now down to under Rs 4 crore. The money would last seven months, give or take.

But the orders, thanks to the bad press, were down to only 1,000 a day and TinyOwl wasn't discounting any more. Swiggy had taken over from TinyOwl.

Sources at Bengaluru-based Swiggy said they are currently processing more orders than Zomato.

That is when TinyOwl committed its third mistake.

In the first week of December, Mandad announced to his team that the company was going to launch a new version of TinyOwl. "Everyone was caught off-guard," recalls a former employee.

It was now going to do a dish-based aggregation system. If you open the app, it will tell you the dish for today is dosa.

The app would then give you options of where you could order from.

"There was hardly any artificial intelligence used. There was no data analytics," said an employee who helped develop the system. The listing business was to go on but the focus would be dishes. The pivot tanked with just about three orders a day as of two months ago.

Then, just before Mandad went on a three-week break in December, he made mistake number four - he hired a chief technology officer. Akash Saxena is learnt to have joined as CTO at Rs 1.5 crore a year and a joining bonus of Rs 50 lakh.

The investors, who had so far been hands off, were counting every penny now. So, around 10 from the tech team got fired, to convince investors that cost had not risen, said another employee.

At its peak, the tech team had 200, working on just the app. Now, it has 20. The total staff strength - once 1,100 - is now under 200. This is when Mandad remotely asked the Bengaluru office to be shut down. When Mandad returned in January he began preparation for mistake number five.

He started discussing another pivot: an area-based food aggregation, similar to what Grofers runs in grocery.

"In this, let's assume, you ordered roti, sabzi and dal. TinyOwl would get all three from different restaurants and deliver it to you," said an employee who recently quit. He had raised serious doubts over the scalability of the model.

In this business model, TinyOwl had to pay for the logistics of gathering the food from various restaurants. It would cost TinyOwl dear.

For the area-based food aggregation plan, more cash was required and all head of the departments were told to find new jobs.

"We asked him (Mandad) to make Homemade (TinyOwl's amateur chef aggregation business) the key focus. The only competitor was HolaChef and we could take them on," an employee said. Instead, Homemade, the only arm of TinyOwl that breaks even, was dissolved. That's mistake number six. Mandad and the investors initiated a valuation audit, which confirmed that the company was on sale. The hope, among the founders, is that the company will be absorbed by Zomato as Sequoia is a common investor. A few former employees said that Mandad had hinted Ola may be interested as well.

But these talks, too, failed. Reports emerged that TInyOwl maybe in talks with Roadrunnr in an all-stock deal. But the reports could not be confirmed.

Zomato refused to comment on the reports that TinyOwl had approached them looking for a buyout. Emails sent to TinyOwl, Ola and Roadrunnr did not elicit a response.

HSBC Slashes Zomato’s Billion Dollar Valuation By Half

 

In less than a week after Fidelity Rutland Square Trust II and Valic Co. marked down their stake in Flipkart by 20%, it is now the turn of HSBC’s brokerage arm to slash down the paper valuation of restaurant-discovery platform Zomato by 50% to $500 Mn from the earlier valued $1 Bn.  This is about half the valuation at which the restaurant search firm raised its last round of funding in September.

HSBC Securities and Capital Markets in a detailed report, titled ‘India Internet – Lot of Growth but Slim Pickings’ raised  concerns surrounding Zomato’s advertisement-heavy business model, growing competition in the food ordering space and money-losing international operations for the lower valuation. The report stated,

“Zomato is present in 23 markets so early on and none is profitable, which implies that to address both the investments in last-mile delivery and losses in international operations, fund-raising will be a continuous phenomenon, suggesting current valuations don’t make much sense. We do a discounted cash flow (DCF) analysis and value the business at 50% lower to the $1-Bn valuation.”

InfoEdge which holds nearly 50% in the Gurgaon-based Zomato and also runs sites like Naukri.com, 99acres and Jeevansathi, among others, however disagrees with the markdown. In a statement to Mint, Sanjeev Bikhchandani, founder and executive vice-chairman of Info Edge, said, “We respectfully disagree with several of the points raised by the HSBC report. Zomato’s “revenue has more than doubled in the last nine months and continues to head north at a good clip. Costs have been rationalized and burn is down by more than 70% from the peak. The company has plenty of cash and its unit economics are really good.”

Interestingly, in the same report, HSBC has also lowered the valuation of another InfoEdge investee company, PolicyBazaar, by 10% from the current $200 Mn.

However, the note by analysts Rajiv Sharma and Darpan Thakkar have a negative view and explain in detail why the brokerage firm affected the markdown. The notes say, “Competition will always find it easy to take share via other routes, particularly online last-mile delivery model. We understand that last-mile delivery is not easy but unless Zomato leads in this space it will find it tough to retain market share. Particularly, we have Swiggy in India which is very active in the space and has been getting funding at regular intervals.” As per the analysts, restaurants that pay for advertising only account for around 6-8% of Zomato’s overall database and the nascent online food ordering business will take time to develop into a strong revenue stream.

Meanwhile Zomato also disagrees with the brokerage firm’s negative view. Founder Deepinder Goyal has come up with a detailed blog post titled Unicorn Or Not in which he spoke about Zomato’s GMV, ad sales profitability, and refuted arguments made by the report.

The notable points from the post are-

• Our traffic in India, our home market, also grew 8% in April 2016 over March 2016.
• We are currently present in 23 countries, and we are the market leaders in 18 of them.
• We are able to divert traffic to transactions businesses (ordering, and table reservations) without any additional customer acquisition cost
• We hit 33,000 online orders yesterday – at our average order values, it makes us the largest player (and only profitable players on a unit economics level) by GMV (there’s a blog post coming soon about our food ordering economics).
• We already are profitable in the order business at a unit economics level, and the overall online ordering business will hit profitability when we get to an average of 40,000 orders a day. We should get there in the next 3-6 months.
• We are monetising the traffic in Australia already, and Melbourne and Sydney are already in the top 5 revenue generating cities for us across the world.
• We have significantly healthier margins in our ad sales business than pretty much anyone most people know.
• Our revenue has doubled over the past 9 months. Costs have been rationalised. Burn is down 70%from the peak.
• More than 95% of the restaurants in our core markets have yet to be monetised. Mobile, which is over 50% of our traffic, is yet to be monetised seriously – the new product which will be out before the end of the May will completely change the face of mobile app monetisation for us.
• Fifteen out of the eighteen countries where we are traffic leaders are yet to see serious monetisation efforts.
• We are aiming to hit overall profitability (without compromising on growth) at an overall company level in the next 6-12 months

Deepinder added,

“Nobody who knows our business has marked down our valuations. In fact, our existing investors are bullish about us, and are willing to back us further, if needed. And they have categorically said that our valuations are justified. Especially because we are more than doubling year on year, and the next year looks even more exciting for us. But external perceptions of valuations are determined by the state of the market, and the availability of facts to the person who is analysing these numbers.

In the last round, Zomato raised $60 Mn funding in September 2015, largely from Singapore’s Temasek Holdings Pte and existing investor Vy Capital, with the company being valued at about a billion dollars. The company, in which Info Edge owns about 47%, has raised about $225 million since inception in 2008. The markdown interestingly follows a spate of rough events at Zomato, which since the last year, has had to lay off 300 employees as it restructured its business, close operations in a few citiessuch as Lucknow, Kochi, Indore and Coimbatore, and even saw top talent leaving the company. The company ordered the food ordering segment in April 2015 last year and has been fighting it out with competitors such as Bangalore-based Swiggy and Rocket Internet-backed Foodpanda to gain market share in a category which has very high user acquisition costs.

Food technology sector has been witnessing a lot of churn with slowdown in funding and many startups either shutting down or getting acquired or downsizing as capital becomes scarcer. Case in point being food-tech startups Dazo and Eatlo which shut down operations last year and Internet-first kitchen Spoonjoy, which scaled down its operations in Bangalore and shut down in Delhi. Similarly, Foodpandareduced its workforce by 15% in December in order to move towards profitability combined with adjustments to its business model. Likewise, TinyOwl fired around 160 employees last year, shutting operations in four cities.  It is said to be in talks with B2B online service provider platform for hyperlocal logistics services Roadrunnr for a merger.

The battle in the food ordering space now looks limited to three players—Zomato, Swiggy, and Foodpanda. And if latest findings from Gigato, a mobile app and platform that allows app publishers to reward its users based on the data usage incurred on the app, are to be believed, Foodpanda dominated the food delivery space with 57 % people using the app to order food, followed by Zomato at 14% and TinyOwl at 12%.

Risk from formidable competition is something the report also stressed on. It said, “If companies in the online food delivery business, in particular, gain market traction, Zomato.com’s advertising business model could lose business. As a result, we think the company needs to develop a profitable online delivery business itself (and not outsource) at least in its top markets to complement restaurant search. This implies that Zomato.com will have to keep raising funds and investing for some more time to come, which would dampen profitability for a couple of years,”

In his blog post, however Deepinder allays these fears saying Zomato is far from done. He says, “ There’s something that we say often – “we are only 1% done”. We are truly 1% done, and if we continue to focus on execution, the noise will die down very soon.” It will be interesting to see Zomato’s 99% as the battle in the food ordering space intensifies.

Bangalore Based Fashion Etailer Fashionara Shuts Down Operations

 

Bangalore based fashion etailer, Fashionara, has shut down its operations. The company was founded by former Reliance Trends CEO Arun Sirdeshmukh along with Darpan Munjal, former chief technology officer at Times Internet Ltd, in 2012.

The company’s website is not working since last week and there has been hardly any update on the social media channels from a couple of days except from the automated scheduled tweets.

Co-founder Darpan Munjal had left the company in January this year, as confirmed by him. He is currently operating Squadhelp.com, a Crowdsourcing platform helping startups and businesses across the globe building memorable brands.

The company was backed by Lightspeed Venture Partners and Helion Venture Partners, and had raised over $4 Mn Series A. There were also news about the startup raising $7-8 Mn in year 2014 and shifting to a marketplace model from being a pure-play fashion portal.

Messages sent to Arun did not elicit any response, however, in an emailed response, Bejul Somaia of Lightspeed said, “Lightspeed exited its position some time back and are no longer an investor so we can’t comment on your email. Suggest you contact the company directly.”

The company’s net sales jumped five-fold to INR 32.86 Cr. in the financial year 2014-15. But its net loss widened to INR 32.13 Cr. from INR 21.11 Cr. in 2013-14.

It had a 25,000-sft central warehousing facility in Bangalore from where it ships out the products to key cities like Delhi, Hyderabad, Mumbai and Pune through various air and on-the-ground logistic tie-ups.

The portal was initially focused upon categories such as apparel, footwear and accessories. In early 2014, it introduced  F.Lea Bazaar, where it enabled selected sellers from the flea markets across the country to retail their products on its portal.

Later in 2015, riding on the wave of growing smartphone and internet ecosystem of the country, it came up with its mobile android app with the flash sale model. Flash Sales implied for sale events where limited number of products are available for limited period at deep discounts. Some of the brands that can be bought on Fashionara under these events included Red Tape, Von Dutch, Biba, Clarks, Twillory, Puma, Levis and many more.

In the same year, it also entered into the home furnishing market, along with Flipkart and Snapdeal, with the launch of 36 brands, 7500 products across 7 new categories.

It was competing with portals such as Flipkart, Snapdeal, Myntra, Jabong, Koovs, etc.

AskMe Sees Exit Of 650 Employees

 

AskMe, a hyper local businesses-focused internet firm, has seen resignations from 650 people across its 40 offices in India. Most of the employees who were let go were in the annual salary bracket of Rs 2.5 lakh-Rs 6 lakh.

According to sources, the company, which is backed by Helion Venture Capital and Malaysia's Astro, is running out of funds. Reports earlier suggested that AskMe's monthly cash burn was more than $6 million.

When asked about the resignations, the company said: "It's the beginning of the new fiscal year and we continue to increase our productivity across functions through automation and better processes as in previous years. We continue to hire talent where required."

Several AskMe employees told their annual appraisals were delayed this year. "We worked hard the entire year and we are let go without the pay we deserve," said an employee.

Some of the employees in Kolkata staged a protest. However, all they could get in return was a promise that their final pay would be released within a week.

Getit Infomedia (AskMe's parent company) has promised the employees they would be given a month's salary as severance payment. Some were told that they might get another job within the group or outside.

"Astro, which holds a majority share in the company, is seemingly no longer interested in funding Getit Infomedia," said an employee who survived the job cut. The employee said the last time Astro invested over Rs 150 crore in Getit, it had to jump through hoops but since then the group company has struggled to establish a foothold in the market. Helion has not shown any interest in doing a bridge round either. "The management has been shopping for other VCs but no one has shown any interest. More resignations may follow," an employee said.

Earlier, the company officials had told Business Standard, they were trying to raise $200 million from Chinese giants Alibaba and Baidu.

One of the reasons VCs have shown no interest is AskMe could be its foray into the grocery business, a source said.

AskMe grocery has a presence in 38 cities with 23 centres in Mumbai alone. It follows the Grofers-PepperTap business model of sourcing products from local retailers.

AskMe was in hot water recently when a furniture maker accused Mebelkart, a Getit Infomedia company, of defaulting on payment of Rs 28 lakh and selling brand imitations.

Established in 1986, Getit was a print-based classifieds company. Astro had made a significant investment in the company in 2010 and again in 2014. In 2013, Getit acquired AskMe from Network18. In 2015, it made two more purchases in the form of Bestatlowest and Mebelkart.

PepperTap Fate Shows Why E-Tail Can’t Live On Discounts?

 

Early April, a journey that started in thea summer of 2014, was about to end. Co-founders Navneet Singh and Milind Sharma decided to shut down PepperTap, India’s third largest e-grocer. They didn’t have an option.

PepperTap was losing money on every order due to discounts, which went as high as 70%, and there were no signs of profitability or more funding.

“Who will give $100 million? The investment climate has changed from what it was a year back. There is no visibility on the next round of funding,” Singh told HT, adding that PepperTap didn’t even look for more money. Not even from Snapdeal, which led PepperTap’s last funding round of $40 million (`260 crore) and hoped to integrate the business.

PepperTap wanted to revolutionise grocery buying – freedom from queues, no parking hassles and no haggling. It was simple— create a marketplace for people to order food online and Singh’s foot soldiers would collect the goods and deliver it within two hours. The plan, however, did not work to script (see box).

Singh could have moved to an inventory-led model from the marketplace model, which works well on scale and requires a lot of money, according to Singh.

Vipul Parekh, co-founder of BigBasket, thinks the other way. “Grocery can only be done if it is inventory-led,” Parekh had told HT earlier. Grofers, too, has shifted to an inventory-led model. Grofers has raised $120 million and Big Basket $150 million in their latest funding rounds.

Some companies, meanwhile, have adopted a tweaked marketplace model. Zip.in, a hyperlocal marketplace in Hyderabad, accumulates orders before noon, purchases them from wholesalers and delivers them later. “Aggregating orders gives us better margins,” said Kishore Ganji, CEO of Zip.in.

Before PepperTap, LocalBanya, Flipkart, Paytm and Ola Cabs have closed their e-groceries. However, Morgan Stanley estimates the sector can grow to $19 billion (`1.25 lakh crore) by 2020, smaller than only electronics and apparels. The report also cements BigBasket’s business model: “BigBasket turns inventory 40 times per year versus 7-8 times for an offline player and has 97.3% on-time delivery.”

Meanwhile, Singh has “a significant amount of money” from the last funding round in the bank. He will use it to build his new logistics venture. But, Snapdeal will have to find a new partner for its grocery dream.

PepperTap shuts down

 

Lessons From The Epic Fails Of Well-Funded Startups

 

In the startup world, failure is a given. Fail fast is the founder’s mantra. Make a mistake, learn from it, move on, say the experts. When startups are well funded—and have a growing number of staff members and stakeholders, it’s not quite so simple.

We know that the road to success is paved with bumps. It’s possible to rise from the ashes of a startup’s crash and burn. We’ve reported how one CEO picked herself up and bootstrapped another startup that’s now a smash hit with over $100 million in revenue. Others pulled a hard pivot when their first idea didn’t measure up.

CB Insights combed its venture and angel investment database and pulled out 92 examples of startups that raised over $100 million but still didn’t make it. Fatal flaws abounded, from financial fraud to competition, or burning through money while being unable to generate sustainable revenue. We’ve winnowed it down to five among them. Here are their cautionary tales.

Quirky—Executed by Expenses

The platform for crowdsourced inventions was met with skepticism at first, but then won over investors and managed to raise over $185 million from well-known VCs such as Kleiner Perkins Caufield & Byers and Andreessen Horowitz.

The problem was a systemic one. Despite the funding, Quirky’s business model was just too expensive. Unlike Kickstarter, which only provides its actual platform for startup founders, Quirky was offering entrepreneurs with a vision from manufacturing to marketing. Taking 90% of inventors’ profits still didn’t prove to add up, especially when also factoring in the security flaw of its smart home device subsidiary Wink.

Rdio—Killed By Competitors

Back in 2010, Skype founders pioneered one of the first on-demand music streaming services to hit the U.S. with a $5 per month web plan that accessed some 7 million songs. Spotify was close on its heels though, and within months, the Swedish startup launched its own free streaming service stateside. Rdio continued to soldier on, refining its products and taking a cautious approach to generating profits that managed to snag $117.5 million from investors.

Unfortunately for Rdio, playing it safe was a mistake, especially in the music business, where labels and licensing deals meant razor-thin profit margins. As one employee put it, "You have to make it up with extreme volume, which is why you see Spotify going after every human being in the world." Rdio’s operating business went bankrupt in late 2015, as Pandora scooped up its intellectual property and some staffers in a $75 million deal.

Webvan—Incinerated By Infrastructure

In an age of same-day delivery of everything from laundry soap to snack foods, it’s hard to imagine that a startup promising to deliver your groceries within a precise window of time would hit the skids. However, in 1999 things weren’t so simple. To make its convenience model work, Webvan poured investments into automated warehouses, logistics software, and a fleet of vans to ferry the goods. The problem was that orders needed to be placed a day or more in advance, killing any opportunity for impulse buys and instant gratification. Although it raised $275.2 million from the likes of Sequoia and Softbank, Webvan couldn’t pay for its costly infrastructure when consumer demand failed to meet expectations.

Boo.com—Busted By The Bubble

Sometimes the early bird fails to catch the worm, especially if it’s consciously ignoring the best ones in favor of those just out of reach. So it was with Boo.com, one of the first entirely e-commerce companies aimed at selling major fashion brands online. It launched in the fall of 1999.

The idea was visionary, but the execution left much to be desired. The company burned through $135 million in VC funding in 18 months, all before releasing its first product. Once live, customers needed high-speed Internet connections to access the site properly. Pile on the fact that money was spent on advertising and promotion rather than product, and no wonder the company declared bankruptcy by mid-May 2000.

Aereo—Laid Low By Lawsuits

In 2012, Aereo launched a "TV-in-your-browser platform" that offered viewers in New York a way to watch live broadcasts in HD on any Apple device for just $12 a month. The idea proved so disruptive, it prompted a surge of lawsuits from media companies.

But not before television magnate Barry Diller and others jumped on board, investing a hair under $100 million in the promise it could scale to multiple cities and was as innocent as putting a pair of rabbit ear antennae on your TV.

Broadcasters weren’t buying Aereo’s argument, and the service went bankrupt after two years. To add insult to injury, the U.S. Supreme Court ordered Aereo to pay out $950,000 to broadcasters last April.

Has Laundry Services Startup Tooler Closed Operations?

 

 

Pigeon Household Services Pvt Ltd, which operates Delhi-based on-demand laundry services startup Tooler, seems to have ceased operations.

The laundry services startup had earlier said it would resume operations after February 15, 2016 but till date there is no sign of it.

Tooler’s Facebook and Twitter  pages continue to say that the startup is undergoing renovation and will resume operations after 15 February 2016. The message reads:

The website, however, does not say anything on suspending or resuming operations.

Queries sent to the company did not elicit a response at the time of filing the report.

A YourStory report said it has closed down for good citing a text message from one of the founders.

Tooler was founded in June 2015 by Himanshu Arora, Vishal Gupta and Sukanth Srivastav and offers its services in Gurgaon, Delhi and Ghaziabad.

In November 2015, the startup raised an undisclosed amount in pre-Series A funding from CASHurDRIVE founder Raghu Khanna and former Paytm executive Samir Gupta.

The on-demand laundry services space has seen considerable activity in the past few months.

Earlier this month, Jaipur-based on-demand laundry startup Urban Dhobi Services Pvt Ltd raised an undisclosed amount of angel funding from Delhi-based serial investors Vinod Bansal and Sanjeev Singhal.

In December 2015, on-demand home cleaning and laundry startup SBricks acquired facility management services company Melway for an undisclosed amount.

In November 2015 on-demand laundry service platform Flashdoor raised an undisclosed amount in angel funding from former Flipkart executive Sujeet Kumar, Flipkart chief business officer Ankit Nagori and Traxcn Labs, while Wassup acquired express laundry service provider Chamak for an undisclosed amount.

UrbanClap Shuts Down Laundry Services

 

UrbanClap Technologies Pvt Ltd, one of the top two home services provider, has shut down its laundry services barely six months after launch, two sources close to the matter told DEALSTREETASIA.

Urbanclap, a mobile-only platform, provides services across 75 categories in Delhi NCR, Bangalore, Mumbai, Chennai and Pune.

Till date, the Delhi-based company has raised almost $37 million in venture capital raising from Bessemer Venture Partners, Accel Partners and SAIF Partners. It also received an undisclosed amount from Tata Sons’ chairman emeritus Ratan Tata who backed the company last December in his personal capacity.

Earlier, the company offered a monthly-subscription for its laundry services but subsequently switched to day-to-day model around October 2015.

An UrbanClap’s spokesperson confirmed that the company had discontinued its laundry service but declined to offer further details. It is still providing dry cleaning services, according to its website.

The laundry service space has witnessed several vertical-focussed players joining fray in the fast-growing market. Urban Clap, on the other hand, is a horizontal player that straddles a wide range of on-demand home services. “As I understand, vertical players are better equipped to handle customer expectations as they are solely focused on one service compared to horizontal players,” said one of the source quoted above, who requested anonymity.

Also Read: India: On-demand home services co Housejoy strikes second deal in Feb, buys startup Orobind Fitness

Exclusive: India’s PickMyLaundry in ‘final talks’ to raise $1m from angel investors

Exclusive: On-demand Indian laundry startup Urban Dhobi raises seed funding

PickMyLaundry, a laundry-focussed startup that is also looking at raising an angel round, was one of the vendors for UrbanClap.

The market has also seen a few housing services players pivot to stick to the laundry niche.

For instance, Doormint, which launched in January 2015 offering on-demand electrician, plumber, carpenter, electronics appliance repair and pest control, now only provides laundry services. The startup is backed by Powai Lake Ventures, Helion Ventures and Kalaari Capital.

This space has also witnessed some consolidation play. Vertical service providers have, in some instances, also reported difficulty in getting funding compared to horizontal players. Mywash, which managed to get seed funding from Orios Venture, failed to attract VC investors.

In February this year, the startup was acquired by Amazon-backed Housejoy.

Hybrid laundry platform Wassup acquired Chamak for an undisclosed amount. Chamak is also backed by Kensington Capital, Index Advisory, Innosight Ventures, Calvert Investments and HNIs including Rajan Mariwala and Sandeep Tandon.

Around the same time, Zimmber bought hyperlocal marketplace Findyahan. Most recently, Housejoy acquired at-home personal fitness start-up Orobind Fitness Technologies.

The laundry services sub-segment, under the fast-growing on-demand home services space, has caught the eye of investors and has seen some deal activity too. Most recently, on-demand laundry startups PickMyLaundry and UrbanDhobi raised funding.

Snapdeal

 

First, watch this video:

 

Now watch these more recent ones.

 

 

 

“We work hard and party harder” – Snapdeal Employee. Spoke to soon.

Ola Shuts Food Delivery Business Ola Café

 

Exactly a year back, Ola launched it’s online food delivery business Ola Café and now it is no more. It seems Ola has shut down Ola Café as the tab does not appear anymore in their mobile app now.

Ola Café was not Ola’s main line of business – they had limited menu and delivered in very limited areas. On the other hand the competition had far more choices for the users. To scale up the operations for Ola Café, they needed to bring far more restaurants with comprehensive menu offerings and needed to cover far more areas.

To deliver food Ola used their partner drivers on the Ola Cab network, which seems to have not worked. Obviously, the cost of delivering food using a cab might have been much higher than a two-wheeler which is what is used by most food delivery boys.

Apart from this, Food-Tech space itself has been quite a difficult for startups. Even after 2-3 years of existence, most of them are burning huge amount of money. Funding has also dried up. Many smaller food-tech startups have already closed down and larger ones like Zomato and Tiny Owl have cut down their work force. This space is also seeing consolidation with smaller food-tech startups are getting acquired by bigger ones!

Now that funding has dried up, it makes sense for Ola to use the money more judiciously and focus on cab market, in which they are the market leader.

Micromax, Once A Rising Star, Struggles

 

 

A year ago, Micromax vaulted past Samsung Electronics Co Ltd to become India's leading smartphone brand. Today, its market share has nearly halved, several top executives have resigned, and the company is looking for growth outside India. 

In Micromax's slide to second place is a tale of the promise and peril of India's booming but hyper-competitive smartphone industry. 

India is the world's fastest-growing smartphone market. Shipments of smartphones jumped 29% to 103 million units last year. 

Rapid growth has helped nurture a crop of local brands, led by Micromax, that outsourced production to Chinese manufacturers. Now, as Samsung rolls out more affordable phones, the same Chinese factories are entering the Indian market with their own brands, depressing prices and forcing Indian mobile makers to rethink their strategies. 

"What the Indian brands did to the global brands two years ago, Chinese phone makers are doing the same to Indian brands now, and over the next year we see tremendous competition for Micromax and other Indian smartphone makers," said Tarun Pathak, analyst at Counterpoint Research in New Delhi. 

Management tensions

Micromax, which was founded in New Delhi by four partners in 2000 but only began selling mobile phones in 2008, built its market share by working with Chinese manufacturers such as Coolpad, Gionee and Oppo to offer affordable phones quickly. In 2015, it launched more than 40 new models. 

In 2014, the founders brought in outside managers to lead the company at a time when Micromax was challenging Samsung to become the largest mobile phone maker in India. 

But tensions arose soon after between founders and the newly hired executives, six former executives told Reuters. These conflicts undermined Micromax's attempts to raise funds for expansion, say former executives. 

Last May, Alibaba walked away from a mooted US$1.2bil (RM4.90bil) purchase of a 20% stake, citing a lack of clarity on growth plans, according to one executive involved in the discussion. Micromax co-founder Vikas Jain said in an interview with Reuters this week that the company and Alibaba disagreed on a future roadmap. 

Alibaba declined to comment. 

Former executives said the lack of fresh funding undermined a proposal by the new executives to move Micromax's research and design operations, which had previously been outsourced, in-house. The move was intended to help Micromax differentiate itself from generic Android clones. 

"We hired about 80-90 people in Bangalore to do in-house software and design, but with no money from the investors and little interest from the founders, that team fizzled away and that office has been partially shut down now," said a former executive. 

After Alibaba walked away, Micromax struggled to attract other investors who would have been key to Micromax's plan to invest in software R&D and hardware design. The company was forced to scale down the in-house R&D project, a top executive involved in the fundraising plan said. 

At least five senior executives have resigned since November. The latest was Vineet Taneja, chief executive since 2014, who quit last week. 

"The whole industry is suffering"

Meanwhile, Chinese handset makers, including Coolpad and Oppo, to which Micromax outsources its manufacturing, were sharpening their focus on India. Samsung, too, began to introduce more affordable models there. 

In 2015, Chinese brands doubled their market share to 18%, according to Counterpoint Research, taking away business from Indian budget phone makers such as Micromax, Intex, Lava and Karbonn. Indian brands' market share fell from 48 to 43% last year.  

"Right now the whole industry is suffering because of the Chinese phones," Jain told Reuters. "We have seen large write-downs happening on inventory in China, and that inventory is being passed on to India at a markdown." 

Chinese phone makers including LeEco, Xiaomi and Lenovo have also partnered with e-commerce companies including Amazon India and Flipkart to sell phones directly to consumers, saving on distribution and sales and reaching new online shoppers directly. 

In the final quarter of 2015, Micromax's shipments fell by 12.1%, against growth of 15.4% for the sector, according to industry tracker IDC. Micromax's share of the smartphone market fell to 13% in the fourth quarter from 22% at its peak in 2014, according to IDC. 

Micromax, which is privately held and does not disclose financial information, maintains it is profitable. Founders Jain, Rahul Sharma, Rajesh Agarwal and Sumeet Arora still control about 80% of the company. They have raised nearly US$90mil (RM367.99mil) from investors in the last five years. 

Facing competition from both Samsung and inexpensive Chinese phones, Micromax plans to increase production in India. Jain said that the company plans to double local manufacturing output from 1.5 million units to about 3 million units a month over the next six to 12 months. 

Already a top-10 brand in Russia, Micromax is seeking a partner to help it expand further outside India and diversify into televisions and tablets. 

"Micromax needs to diversify geographically and also needs to diversify product lines," said Neil Mawston, executive director of the global wireless practice at London-based research consultancy Strategy Analytics. How well it manages that diversification, Mawston says, will be key.

The Emerging And Disappearing Magical Food Tech Startups

 

2015 was widely touted to be the year of foodtech startups. TinyOwl is a case in point. Founded by 5 IIT Bombay graduates in 2014, it managed to garner 27 million USD in funds from Sequoia Capital, Matrix Partners and others, in just a few months. Snapdeal founders Kunal Bahl and Rohit Bhansal were among the early backers. But a few months later, things started to go wrong. The company tried to raise 50 million USD some time back. Discussion was on with South Africa’s Naspers and Food Panda. The talks failed, but they managed to get a lifeline of about 8 million USD from existing investors.
Nevertheless, by September 2015, they had let go of more than 200 employees. Harshvardhan Mandad, CEO and co-founder of TinyOwl, wrote in his blog post that the company had scaled back operational resources from 4 cities and would move to the e-sales platform to support customer needs.
Zomato, valued at nearly a billion dollars, has cut 300 jobs and shut its cashless payment in Dubai. The company had raised 220 million dollars from Temasek, Sequoia Capital and Info Edge.

To sum up the year 2015 in terms of investments and deals struck in the food tech sector: in April, it was 74 million USD, with a total of seven deals being struck. In August, this had dwindled to 19 million, with only five deals, and, by September, only a measly two deals had been struck. And Dazo had shut shop. More recently,Pepper Tap has closed operations in a few cities.
While there was initially a flurry of funding for online food tech startups, they are hard pressed to attract more funds to fuel their cash burning businesses. According to experts, this is a necessary and natural process of evolution, and, following the Darwinian theory, the fittest will survive.

And the key to survival will be the ability to bring about a consistent change in customer preferences. This could take a minimum of one generation, or ten years of push. This means that either you or your investors have deep enough pockets to tide over the rough and lean patches. And it doesn’t mean that you consistently churn out the same stuff. Foodies are a fickle lot. One has to have a real passion for the business, to constantly develop new tastes and change the presentation, in order to ensure repeat orders and to satisfy an increasingly consumerist society, eager for instant gratification in everything.
Among the other concerns in this business, the problem of plastic remains one of Himalayan proportions. Everything has to be disposable, as the joint family system has broken down and nuclear families with two wage-earners find it hard to train and retain domestic help. Unfortunately, the environment cannot dispose of plastic waste in the same time or ease with which we bundle it up in garbage bags. A few have tried using eco-friendly packing materials, but have had to give up because of escalating costs and possibilities of damage in transit.
What are the solutions for cash-strapped food tech startups? Merging with well-funded companies has always been an option. A case in point is Spoonjoy, which was “acqui-hired” by Grofers in recent times. Dealing in perishables will always be a risky proposition, as the margin for error is very narrow, and the tolerance is near zero. Only those who have the heart (and the stomach) for it will emerge victorious.

Recap 2015: Ten Startups That Lost Their Way

 

 

A bunch of Indian entrepreneurs discovered the rough side of the fancied startup life in 2015. While these ventures showed a lot of promise, they seem to have lost the plot for diverse reasons. Cost cutting became a central theme for ventures that were incessantly burning cash. A few unfortunate ones were compelled to shut shop. Internal clashes and unsuccessful pivots were the other major reasons for turmoil in 2015. Out of the 10 well-known startups that had a rough year, five were food-tech ventures. We take a look at ventures that had a forgettable 2015.

Localbanya
The online grocery delivery sector had its share of highs and lows this year.

Mumbai-based Localbanya, a three-year-old online supermarket backed by Shrem Strategies and Bennett, Coleman & Co Ltd’s Springboard Fund,stopped taking orders in October. Localbanya asked 40 per cent of its employees to leave as it prepared to pivot from being an inventory-led, warehousing-centric model to an online marketplace for groceries. At that time, company officials claimed that the startup would soon make a comeback.

However, there has not been any update on this front.

“We are under renovation. We will be back shortly,” a message on the websites reads.

Karan Mehrotra had founded the venture with Rashi Choudhary and Amit Naik in 2012.

TinyOwl
The hostage crisis at food ordering startup TinyOwl was probably the most unexpected episode of the year. On November 2, Mumbai-based TinyOwl said it was laying off 112 employees, as part of measures to make the business viable. In September, it had sacked about 100 staffers.

A day later, TinyOwl co-founders Harshvardhan Mandad, Saurabh Goyal, Shikhar Paliwal, Tanuj Khandelwal and Gaurav Choudhary travelled to Chennai, Pune, Hyderabad and Delhi offices. Their message to employees was: Take post-dated cheques and agree to quit work. However, employees in Pune demanded full and final settlement. They claimed to have lost trust in the company’s top management. Co-founder Choudhary and a colleague were held hostage at TinyOwl’s Pune office by about 30 irate staffers who had been sacked. Many were incensed as the layoffs were announced a few days after TinyOwl raised $7.5 million (Rs 50 crore) in fresh funding from existing investors Sequoia Capital and Matrix Partners.

It’s CEO, Mandad, said on November 4 that the situation had been resolved. “We have had a long day in resolving a critical situation in Pune wherein two of our employees had been made to stay back in office for over 48 hours. We have been able to resolve this and have immediately started working on considering the demands beyond the terms of employment, placed forward by other employees from other cities,” Mandad said.

Talentpad/Trevo/ Zobtree
Is serial entrepreneurship linked with serial failure? Mayank Jain and Raghav Jain have burnt their fingers thrice.

First, they founded and closed social referral startup Zobtree. Last year, they joined hands with Nikhil Vij to form TalentPad.com (formerly known as Talent Auction), a Bangalore-based curated marketplace for technology recruitment. The trio managed to raise funding from Helion Venture Partners. However, by the middle of 2015 it closed down.

“One of the things that our entire team has been passionate about is making a big impact to a wide-ranging audience. We could not figure out a way to achieve that,” the company said in its final blog post in August.

In October, the same bunch of entrepreneurs ventured into the bus pooling space with Trevo, an app that aggregated tourist and chartered buses in Gurgaon and Delhi NCR. Within a month, Trevo too ran out of steam. Industry insiders say that Trevo shut down due to its inability to raise fresh funding. The company was reportedly scouting for Series A funding of up to $10 million.

Eatlo
Bangalore-based Eatlo is another food-tech venture which ran out of cash. The company, which was founded by Rahul Harkisanka and Sai Priya Mahajan in November 2014, sourced meals from chefs and enabled delivery in select areas of Bangalore.

The chinks in Eatlo’s armoury were showing since early December when it stopped accepting orders. The company unsuccessfully tried to raise Series A funding of $7-8 million. A few weeks later, Eatlo confirmed its decision to pull the plug.

In fact, the startup closed its operations just five months after raising funding from Powai Lake Ventures, Abhishek Goyal of Tracxn Labs and equity crowdfunding platform Globevestor.

“We have temporarily closed our operations and we are re-evaluating things. We are a startup and a lot of things keep changing. We will update once we decide,” Harkisanka told Techcircle.in.

Dazo
Food ordering startup Dazo, which started life as Tapcibo, had barely completed a year before it shut shopin early October.

The venture - founded by ex-Redbus executive Shashaank Shekhar Singhal and Explore-in-Android founder Monica Rastogi - had an illustrious set of backers. It counted CommonFloor co-founder and CEO Sumit Jain, TaxiForSure co-founder Aprameya Radhakrishna, Yo! China co-founder Ashish Dev Kapur and Amazon India country manager Amit Agarwal, besides Google India MD Rajan Anandan, as investors.

Dazo’s decision to wind up operations reflected the challenges facing the food-tech sector - wafer-thin or no margins, high cash burn owing to uncalled-for marketing and low entry barriers for new players.

“As a team we’ve decided to move over this business and we’ll be working on a new product,” the company said in October.

Spoonjoy
Food delivery app SpoonJoy was another casualty of waning investor interest in the food-tech space. The SAIF Partners-backed SpoonJoy was acqui-hired by hyper-local grocery and fresh food delivery platform Grofers in October, after the cash-strapped venture ran out of cash.

The two-year-old SpoonJoy, which counted Flipkart CEO Sachin Bansal and Delhivery co-founder Sahil Barua as backers, was a subscription-based online platform for users to order meal packs.

Though the acquisition ensured that Spoonjoy did not fade into oblivion, its acquirer Grofers has no plans to continue the food-tech business. Grofers CEO Albinder Dhindsa said that his interest lay in leveraging the experience of the Spoonjoy team.

AdMagnet
Sequoia-funded advertising network AdMagnet suspended its operations in October, a few months after its co-founder Ratish Nair left the company because of health problems. AdMagnet was founded by Nair and Sunil Miranda in 2008. It was spun off from Interactive Avenues, a digital marketing agency, co-founded by Nair.

In its heyday, AdMagnet enabled brands to reach 19.79 million unique visitors or 51 per cent of India's internet population.

DoneByNone
Seedfund-backed DoneByNone was one of the earliest causalities in the e-commerce space this year. The private label women fashion etailer went inactive in January.

The company was founded by Amarinder Dhaliwal and Vijesh Sharma in February 2011. Vijay Misra joined hands with the duo later. For two years, the company ran operations under the HandsPick.com brand, before changing it to DoneByNone in 2013. While the founders did not specify why the company closed operations, the inability to secure fresh funding was seen as the primary reason.

Dhaliwal quit the company to join handset manufacturer Micromax as the chief operating officer of its new sub-brand ‘YU’.

Housing.com
Housing.com could easily go down as the most Googled Indian startup of 2015, thanks to its maverick former CEO Rahul Yadav’s headline hitting ways.

Be it Yadav’s email spat with Sequoia Capital’s managing director Shailendra Singh, his infamous run-in with Housing.com investors or the bizarre decision to gift his entire stake to the company’s employees, Yadav never ceased to surprise. He attracted a legal notice for accusing the Times Group of deliberately maligning Housing.com. In a caustic resignation letter to investors, much before he was sacked, Yadav termed Housing.com’s investors as ‘intellectually incapable’. The open feud finally reached its climax in July when the company board sacked him.

Under Yadav, Housing.com had spent Rs 120 crore on advertising, marketing and other business development activities. Soon after Yadav’s ouster, the company shut down unprofitable units and brought in new senior executives. In all, about 800 jobs were cut in multiple rounds. After operating without a full-time CEO for three months, Housing.com appointed its chief business officer Jason Kothari as CEO.

Housing.com, which has so far raised around $120 million from investors, is in talks for fresh funding from existing investors led by Japan’s SoftBank. Housing.com competes with PropTiger in which News Corp, the parent of this news website, owns a 30 per cent stake.

Langhar
Delhi-based Langhar was the first food-tech venture to shut shop this year.

The company was founded in 2013 by Karanpreet Singh, Pankaj Sharma, Sunil Kumar and Pawan Saini and had secured $1,50,000 from ARK Challenge and $20,000 from Times Internet incubator TLabs. Langhar was a community marketplace that served fresh homemade meals by connecting housewives, hobbyists and professional cooks.