hospitality startup Stayzilla remaining shut down for more than a year amid a funding crisis and court cases, the Resolution Professional (IRP) is now seeking expressions of interest (EoIs) from bidders to revive the brand.
In an order to harness the remaining brand value of Stayzilla, its existing assets and pending patents, co-founders Yogendra Vasupal, Sachit Sanghi, and Rupal Yogendra will now reach out to Stayzilla’s investors and potential bidders to explore such options, reported ToI.
As per reports, Karthigeyan Srinivasan, the RP has specified that the bidder should have a minimum net worth of $7.4 Mn (INR 50 Cr) and have the ability to infuse cash of $2.96 Mn (INR 20 Cr).
Stayzilla was founded in 2005 as a homestay aggregation platform. It was based on the concept of enabling people to offer their homes as alternate stays for others. Three years later, Brian Chesky, Joe Gebbia, Nathan Blecharczyk used the same idea to start up Airbnb in San Francisco, now unarguably the world’s largest homestay aggregator platform.
Stayzilla: The Story of Free Fall
Stayzilla, despite having successfully raised over $34 Mn from investors like Matrix Partners and Nexus Ventures Partners, was soon mired in a number of controversies.
While in February 2017, Yogendra Vasupal, the CEO of the homestay aggregator, announced Stayzilla’s closure citing various issues, in March 2017, advertisement Agency JigSaw Solutions, a vendor of Stayzilla, filed a criminal case against the company and its co-founders, alleging a fraud of $265K.
Since then, the founders have been in and out of jail, depending on bail pleas.
On March 21, a divisional bench of the Supreme Court dismissed a civil appeal by Vasupal. The decision came three months after the court gave an interim order of status quo in an appeal against the insolvency proceedings of the homestay aggregator. The insolvency proceedings were ordered earlier by the National Company Law Tribunal (NCLT) bench in Chennai.
While the Stayzilla cofounders claimed that they were wrongly framed by Jigsaw Solutions and that the entire incident was an attack on the startup ecosystem in India, Aditya CS of Jigsaw alleged that the founders were fraudulent and that the company had never apprised Jigsaw of any problems in the latter’s services to Stayzilla.
While the matter is still under sub-judice, and over 170 leading startup stalwarts — including Paytm CEO Vijay Shekhar Sharma, Ola’s Bhavish Aggarwal, and Mohandas Pai of 3one4 Capital — have come forward and have signed an online petition to support Vasupal, a sincere intervention from investors and the board members could have saved the brand in time.
Update On May 28, 2018, 9:00 AM:
The minimum net worth of a bidder was wrongly stated as $22.2 Mn for INR 50 Cr and ability to infuse cash was stated as $3 Mn for INR 20 Cr. It has been rectified now.