“Despite having a very clear lead, despite a lot of firsts, despite being successful in getting an ecosystem up from scratch pan-India, there are a few reasons why we are at this juncture,” writes Yogendra Vasupal, founder and CEO of Stayzilla.
Backed by marquee venture capital firms like Nexus Venture Partners and Matrix Partners, Bengaluru-based Indian homestay network Stayzilla suspended its operations yesterday. Founder Yogendra announced his decision via blog post.
“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.”
Founded in 2005 as Inasra, and later rebranded as Stayzilla in 2010 – the platform acted as a marketplace for homestays and alternate stays in India, with around 55,000 stay options across 4,500 towns in the country.
The platform catered to both homeowners and travellers looking for differentiated, unique stay experiences. Yogendra founded the company with his wife Rupal Yogendra and his friend Sachit Singhi.
Initially, funded by Indian Angel Network with an infusion $500K in Seed round, Stayzilla had raised an undisclosed Series A in 2013. It got further funding in 2015, when Nexus and Matrix put in $20 Mn in Series B and later $13 Mn Series C in 2016. The startup competed with Fab Hotels, Yatra, OYO, Airbnb, MakeMyTrip and others.
Why A Bumpy Ride?
Although it had first-mover advantage in the space, its growth amped up only after it was rebranded. Yogendra accepted that this was achieved at quite a high-cost and had a lot of pitfalls. He realised that – what can be easily taken as granted in the western market – in India, required a whole lot of brainstorming. He laid out a couple of reasons which led to the failure.