[Update] Celebrity Engagement Startup GoNuts Shuts B2C Operations

Celebrity Engagement Startup GoNuts Shut Operations

SUMMARY

Founder of GoNuts last month has decided to shut its B2C operations as the startup’s target audience were not growing

The startup has raised more than INR 7 Cr from investors including former Zomato cofounder Pankaj Chaddah, Ramakant Sharma, LetsVenture, among others

GoNuts has has also released all of its employees in the B2C vertical from their duties.

Update | July 18, 2023| 12:00 PM

Almost 8 months after the story was published, GoNuts founder approached us and said that the company would just be shutting down its B2C arm and would continue to operate as a B2B entity. Though, in our earlier conversation, he had said he along with another cofounder would engage with existing B2B clients without revealing any information. We have updated the headline of the story to reflect the same.

The year 2022 has turned out to be a pretty grim one for the burgeoning startup ecosystem of India. Difficulties in raising new funding rounds, mostly because of the global economic slowdown, has resulted in startups looking for ways to cut expenses. Many startups have resorted to laying off employees to increase their cash runaway. Apart from layoffs, several Indian startups have also shut their operations because either they failed to raise a fresh funding round or the market they were in was not growing any further.

Mumbai-based celebrity engagement startup GoNuts has become the latest entrant to this growing list of Indian startups to have shut operations. GoNuts, which was founded in early 2020, took the decision to wind up operations last month (September).

GoNuts founder and CEO Vinamra Pandiya confirmed to Inc42 that the startup has shut operations, and said that its website, which is live currently, would be taken down in the next couple of days.

Further, the startup has also released all of its employees from their duties.

Pandiya said that he, along with his other cofounders Mayank Gupta and Joji George, has informed the investors and employees about the decision to shut operations.

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What Went Wrong?

Over a call, Pandiya cited three reasons behind the decision to shut operations. The first reason he said was that the target audience had not grown over the past three years. “In India, a customer will think 50 times before purchasing a product if it costs over INR 1,000,” he said.

The second reason was the lack of venture funding in the space. “If you see any flourishing sector such as foodtech or ecommerce, it took them six to seven years to grow with the help of patience capital. We didn’t have that either. A big VC wasn’t convinced about the target audience of this space,” Pandiya added.

Apart from this, he said that the startup didn’t want to offer heavy discounts as it would affect the perception of the celebrity and would further “kill the novelty of the product”.

Pandiya said the founders will learn over the next few days if they can buy back shares from their investors or will have to completely shut down the legal entity.

As per him, the startup, which onboarded over 2,000 celebrities, has raised around INR 7 Cr till date in two funding rounds from investors. It is backed by investors such as LetsVentures, 9Unicorns, AngelList, Sweta Rau, Archana Priyadarshani, Ramakant Sharma, Pankaj Chaddah, and Harshal Morde.

Pandiya further said that though the startup would be shutting down its core B2C business, he and cofounder Mayank will continue to engage with its existing 300 B2B customers. He, however, didn’t share more details on the same.

He said it is too early to say if the cofounders will be starting a new venture around the B2B business. While the two cofounders will independently continue to engage with the brands, third cofounder George will exit the firm.

The celebrity engagement space is at a nascent stage currently. It saw two new players – Tring and TrueFan – emerge in 2020 and raise fresh funds. While AltBalaji acquired 17.5% stake in Tring for INR 15 Cr, TrueFan raised $4.3 Mn in a seed round from venture capital firms Mayfield India and Saama Capital, and media industry veteran and serial entrepreneur Ronnie Screwvala.