File photo of Stayzilla co-founders Sachit Singhi, Yogendra Vasupal and Rupal Yogendra.(File photo)
For some it might be a state of fear, for others it signals the future of the Indian startup ecosystem, which continues to witness companies collapsing one after another.
Yogendra Vasupal was arrested by the Chennai police on charges of fraud, and inability to pay dues after his company Stayzilla, a homestay and hotel aggregating startup, ran out of money.
Vasupal’s story is not very different from many startups who raised money when the market was ripe, but failed to sustain their businesses when the funding dried up, which eventually led to shutdowns.
Stayzilla shut operations a month ago, and Vasupal said that he will reboot the business. But, for that, too, he would need money. He confessed that he was chasing growth over positive unit economics — a matrix which most startups fail to address. As a result Stayzilla ran out of funds.
That is also the case for many other startups, who grew on investor money, by offering discounts and special offers.
The e-commerce business is a classic case in point. And it is not for no reason why Vasupal has garnered so much support from the startup world — most of them face similar problems.
Kunal Bahl, co-founder and CEO of Snapdeal tweeted: “Many startup founders, including myself, have seen the ugliness of getting on the wrong side of people with bad intentions.”
A quick look at Snapdeal will show that the company is going through its roughest patch. Its vendors have complained of dues…