The Stayzilla saga: Here's how the start-up evolved then shut down

Stayzilla shut its business after it failed to keep up with rising competition

Stayzilla, an alternate stay aggregator shut its business after it failed to keep up with rising competition from MakeMyTrip and GoIbibo. It was once refered as one of the successful companies which has emerged from Chennai.

Yogendra Vasupal, who has been an online entrepreneur even while he was a student, along with his friends Sachit Singhi and Rupal Surana (now Rupal Yogendra), has been looking for an online business idea to work on, as early as 2003 itself. Their search through various businesses has ended up in the hospitality industry. Last month, Vasupal admitted he made bad decisions that led to losses and wanted to rebuild the company in a new avatar.

Here is a look at how the company evolved:

In July 2005, they launched Inasra Technologies to work on business model in the sector with the help of technology. While it was able to scale up to over 200 cities in a few years, the challenges were to ensure that the customers are guaranteed to get the room at the hotel, even though the booking has been confirmed through the technology platform and the growing competition in the travel booking space. It stopped service for a short while to improve its services, but the challenges continued.

In 2010, Inasra.com was rebranded as Stayzilla, as the company wanted to provide alternate stay in all "zillas" (districts) of the country. The market size then was $7-8 billion, but the segment was highly fragmented.

In March, 2012, the company raised a seed funding of $500,000 from Indian Angel Network. The funds were expected to be used for marketing. The company then had around 4,000 hotels listed in its platform in across 600 cities. The fund-raising was expected to help it to expand in more cities and for an aggressive growth.

In October 2013, it raised a series A funding of an undisclosed amount from Matrix Partners India. The funding was to be used in expanding the team, increasing its partner network to over 15,000 hotels and improve the customer service activities, said the company.

By August 2014, the company has crossed 15,000 stays in over 1100 cities listed and had more than 500 bookings per day, according to a report. The brand was also built over a period of time, through advertisement banners or luggage tags in various major airports in the country. The company was in an aggressive growth path.

In January, 2015, the company launched a mobile app to offer listing of available rooms on the mobile phone.

In February, 2015, it has raised around $20 million in a Series B funding led by Nexus Venture Partners in which existing investor Matrix Partners also participated. The funding was to help the company to expand to new cities and for branding activities, to increase its presence in the alternate accommodations market in the country. By then, the platform had around 25,000 accommodations listed in 1,200 towns, said reports during the time. Plans were to expand operations to 50,000 properties in 8,000 locations by end of the year. 

In March, 2015, the company said that it is looking at raising the next round of funding by going to market by August or September, for a bigger round of funding.

In May, 2016, the company appointed former Twitter Director Pankaj Gupta as Chief Product Officer and President of Technology. The company was looking at doubling the listings on its platform to over 1 lakh in a year in the homestay and alternative stays. 

In May, 2016, the company raised its Series C of funding of $13.5 million from the existing investors Matrix Partners and Nexus Venture Partners.

In June, 2016, the company appointed former Goibibo director Gopalakrishnan as vice president of products

In February, 2017, the company announced that it is suspending operations and would reboot with a different model. The company has been in trouble for some time in terms of its business. 

On March 14, Singhi issued a letter online that Vasupal is missing but was arrested by the Commissioner of Police's office.

On March 15, A bail application was moved by Vasupal's lawyers to release him. The startup community including Flipkart''s Sachin Bansal have backed Vasupal