While 2013-14 was the year of umpteen startups entering the market, 2015 seems to be the year of consolidation, exits and shutdowns. In yet another example, Townrush, B2B delivery logistics startup has reportedly shut down its operations due to failing to raise funds.
The startup failed to pay salaries to its employees for three months, according to our sources.
Townrush is an urban logistics and on-demand delivery platform that helps in getting local goods delivered in a city within an hour. It connects merchants and customer to local logistic providers in real-time and arrange the complete shipment life-cycle till it reaches its final destination. It also has premium delivery service where goods used to get delivered within 30 minutes at a premium rate.
The Bangalore-based startup that has been ailing with cash crunch for a while, has apparently fired the delivery team comprising of 30 people. The delivery team including employees have vandalized their office in Bangalore as the company failed to pay them salaries.
Related Article: Logistics Startup Townrush Raises Seed Round From Lightspeed
Ex-Flipkart employee Saurya Prakash and Tushar Bisht, ex-software engineer at Facebook, started Townrush in May this year. It recently secured an undisclosed amount in seed funding from Lightspeed Venture Partners. The startup was processing over 500 orders a day within Bangalore alone, as of July.
Mails sent to the founders, Saurya and Tushar did not elicited any response. We tried calling the founders, however, their numbers were not reachable at that moment.
In an emailed response, Maninder Gulati, Lightspeed India Partners Advisors, said, “Townrush is shifting their focus from P2P delivery to a more tech enabled approach to hyperlocal logistics. He further added that the company has downsized the delivery workforce and have settled all their dues.
It is competing with other hyperlocal logistics startups like Bangalore-based, Roadrunnr and Parcelled and Mumbai-based Grab. Roadrunnr raised $11 Mn from Sequoia Capital, Nexus Venture Partners and Blume Ventures, while the later was funded by Tracxn. Grab got investment from Zomato. Another B2B hyperlocal delivery startup, Gurgaon-based Shadowfax had raised $300K from Kunal Bahl and Rohit Bansal of Snapdeal, Zishaan Hayath of Powai Lake Ventures and Prashant Malik of Limeroad.
In just last few weeks, number of startups have been reported to have closed down their businesses including LocalBanya, Dazo and few others like Spoonjoy who are looking for funding to manage operations.
India has seen the emergence of a strong startup ecosystem. According to VCCEdge report, there were around 140 deals in first six months of 2015. This was 94% higher during the same period last year. In just last three months, angels and seed investors poured $58 Mn in early stage startups. VC funds invested around $725 Mn in 89 startups. Every year, over a 1000 startups are born, while only a handful are lucky to raise funds for sustenance.
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