Valuation is a function of revenues and customer traction. The company did not achieve either. However, once the founding team was shown the door, the problem deepened. With it, the business is now barely managing to survive. The only way it can survive is if Softbank takes ownership of the idea and boosts the business.
Although the startups have become a permanent fixture in Indian industrial scenario, a lot of ideas are bound to collapse. The real estate aggregator business is heading towards consolidation just like several food apps and food delivery startups have started bleeding. Market place business models are going to consolidate because there is little differentiation between the companies. Quikr has acquired CommonFloor reportedly for a little more than $100 million (The management of CommonFloor told Businessworld that they did not want to comment on the acquisition and say it is speculative for the moment).
Similarly, the battle between Oyo Rooms and Stayzilla is going to become bigger.
The gossip about town is that next year you will have two large etail companies - Snapdeal and PayTM - merging. There has not been any recent fund raising by Flipkart. The money is indeed drying up slowly and before long Indian startups will have to chase funds that compliment their business. High net worth individuals are the best bet these days to raise money from. Hopefully, the HNI rush to fund startups enables them to build great services, rather than building businesses that do not last, especially after raising huge amounts.
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