Following tough competition from rivals, Bengaluru-based Indian homestay network, Stayzilla, suspended its operations yesterday. Founder Yogendra announced his decision via a blog post. He had founded the company with his wife Rupal Yogendra and friend Sachit Singhi after dropping out of college in 2005.
He wrote, “I would like to announce today that 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.”
Stayzilla was founded in 2005 as Inasra and later renamed as “StayZilla” in 2010. It was a huge marketplace for homestays and alternate stays in India. It gave its customers 55,000 stay options across 4,500 towns in the country. The firm catered to the needs of both home owners and travellers looking for unique stay experiences.
The startup was competing with renowned companies like Fab Hotels, Yatra, OYO, Airbnb, Make My Trip and many others. Yogendra gave out several reasons for the failure of his brand. He said that what he had achieved was at a very high cost. He also said that the supply-demand mismatch had led to the company’s downfall.
As he says, “We can’t really take a focused city-by-city approach in terms of matching supply and demand. The demand and supply for homestays were non-existent 18 months back, excluding a few small pockets. As a result, we had to invest extensively in both sides of the marketplace – creating homestays as well as guests who would choose a homestay across the country.”
Stayzilla was spread over different states, including Andhra Pradesh, Assam, Uttarakhand, Chhattisgarh, Madhya Pradesh, Punjab, Gujarat and Odisha.
According to a report by FirstPost, in 2016, as many as 212 startups had shut shop, as against 140 in 2015 as investors became vary of the business model and profitability. Snapdeal, India’s third largest e-commerce platform, has also started laying off people and shrinking its operations.
SheThePeople.Tv spoke to Prateek Kathuria, a management student about the same.
“This is a big setback for the start-up ecosystem. I really like the company and their services. Though the plan was executed perfectly, it couldn’t survive for very long.”
Image Credits: Yourstory.com
Charvi Is An Intern With SheThePeople.TV