Stayzilla stops operations; to focus on new business model

Stayzilla, online homestay and alternate stay aggregator, suspended its operations recently, and is planning to come back online with a new business model. The startup, cofounded by Vasupal, Sachit Singhi and Rupal Yogendra in 2007, started by offering budget hotel accommodation to travelers but eventually started focusing on home stays since last year. It has more than 55,000 stay options listed in its database spread over 4,500 towns. The startup had raised around $33 million in funding from Nexus Venture Partners and Matrix Partners across multiple rounds.

Vasupal, the cofounder of Stayzilla, said that “The initial seven years were all about having negative working capital, positive cash flow and a sustained ability to fund our own growth. Those were the only metrics we tracked. In the last 3-4 years, though, I can honestly state that somewhere I lost my path. I started treasuring GMV, room-nights and other ‘vanity’ metrics instead of the fundamentals of cash flow and working capital”. With the founder admitting lax regard to finances leading to the troubles, it is another sad story of an Indian startup dream dying down.