Stayzilla Sus­pends Ops, to Re­boot with a ‘Dif­fer­ent Busi­ness Model’

Co didn’t fo­cus on fundamentals like cash flow & work­ing cap­i­tal: Co-founder

The Economic Times - - Disruption: Startups & Tech - Vikas.Sn@

timesin­ter­ Ben­galuru: On­line home­s­tay and alternate stay ag­gre­ga­tor Stayzilla has sus­pended its op­er­a­tions and will re­boot “with a dif­fer­ent busi­ness model”, said co­founder Yo­gen­dra Va­su­pal.

“We would be bring­ing to a halt the op­er­a­tions of Stayzilla in its cur­rent form, and look­ing to re­boot it with a dif­fer­ent busi­ness model,” said Va­su­pal in an of­fi­cial blog­post.

Started in 2007 by Va­su­pal, Sa­chit Singhi and Ru­pal Yo­gen­dra, Stayzilla started off by of­fer­ing bud­get ho­tel ac­com­mo­da­tion to trav­ellers but shifted its fo­cus to home stays early last year.

It claimed to of­fer trav­ellers more than 55,000 stay op­tions across 4,500 towns in the coun­try and also had tie-ups with seven state tourism de­part­ments in­clud­ing Gu­jarat, Andhra Pradesh, Mad­hya Pradesh, Ut­tarak­hand, Pun­jab, Odisha, Ch­hat­tis­garh and As­sam.

Stayzilla had raised a to­tal of around $33 mil­lion in fund­ing from in­vestors like Nexus Ven­ture Part­ners and Ma­trix Part­ners across mul­ti­ple rounds. It was pre­vi­ously head­quar­tered in Chen­nai and had re­cently con­sol­i­dated its prod­uct and en­gi­neer­ing teams in Ben­galuru.

“The ini­tial seven years were all about hav­ing neg­a­tive work­ing cap­i­tal, pos­i­tive cash flow and a sus­tained abil­ity to fund our own growth. Those were the only met­rics we tracked. In the last 3-4 years, though, I can hon­estly state that some­where I lost my path. I started trea­sur­ing GMV (gross mer­chan­dise value), room-nights and other ‘van­ity’ met­rics in­stead of the fundamentals of cash flow and work­ing cap­i­tal,” added Va­su­pal in the blog post.

This move comes just a month af­ter two of In­dia’s largest travel book­ing por­tals Ibibo Group and MakeMyTrip com­pleted their merger last month. Other play­ers in the seg­ment in­clude Ya­tra which started trad­ing on Nas­daq af­ter a re­verse merger last year and SoftBankbacked OYO Rooms.

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