Why Million Dollar Indian Homestay Startup STAYZILLA Failed?


Stayzilla was an Indian online marketplace for alternate stays and homestays.

Key Details of the startup:

  • Founders: Rupal Yogendra, Sachit Singhi, Sachit Singhi, Yogendra Vasupal
  • Started in: 2005
  • Closed in: 2017
  • Number of employees: 250-500
  • Funding Amount: $10M-$50M

Stayzilla failed because of several reasons, some of which include:

  • Funding: Stayzilla struggled to raise enough funding to sustain its business. The company’s revenue was not enough to cover its expenses and it struggled to raise additional funding.
  • Business Model: Stayzilla’s business model was based on a commission from the homestay owners and as the company’s network grew, the costs of customer acquisition went up, and it was not able to monetize the business effectively.
  • Intense competition: The company faced intense competition from other online travel booking platforms, such as OYO and Airbnb, which had more resources and better brand recognition.
  • Lack of clear differentiation: Stayzilla’s unique selling point was its focus on budget and alternate stays, but it was not able to effectively communicate this to the customers.
  • Impact of global events such as demonetization and GST: Stayzilla also faced challenges related to India’s demonetization and the implementation of the Goods and Services Tax (GST), which affected the company’s revenues and cash flows.
  • Management issues: The company’s founder and CEO, Yogendra Vasupal, was arrested in 2017, which added to the company’s woes.

These are some of the possible reasons why Stayzilla failed. It’s important to note that the failure of a startup is usually caused by a combination of factors, and it’s not always possible to identify a single reason for the failure.

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