Tiger Global and Lightspeed Venture Partners-backed local household and personal services marketplace LocalOye is recasting its business model to focus more on business-to-business (B2B) customers for better monetisation, its founder told Techcircle.in.
“We don’t want to put in a lot of money in marketing initiatives in an attempt to acquire a customer in a business-to-customer (B2C) model. We are now focusing on acquiring customer in a cost-effective way, and thus are focusing on the B2B business,” said Aditya Rao, founder, LocalOye.
LocalOye, run by Mumbai-based Imma Web Pvt Ltd, has been struggling with weak unit economics and high cash burn while dealing with retail customers. Industry executives, who did not want to be named, told Techcircle that almost 80% of the staff had been laid off.
When asked, Rao said LocalOye is reducing its staff strength but the company is not closing down. “Yes, some employees have been laid off but it is not as if 80% of the staff has left. We will give an official number when we are done with the restructuring,” he said.
Rao said there were around 120 employees as of January 2016, but did not disclose any other details about its current team.
Last year, the firm had laid off 60% of its 100-member call servicing unit, after it decided to automate the process of hiring service professionals.
The firm claims to have tied up with a number of business enterprises to add more revenue streams and has also partnered with other marketplaces to fulfill service requests of their customers.
“Experiments are going as far as B2B tie-ups are concerned and we are building a new team. There is already a small pilot going on with Paytm,” said Rao. “Also, we had a good experience with home rental startup NestAway where their furniture repair and installation was done by us. There are more such pilots in the pipeline.”
LocalOye is now aiming to power the back-end of other B2C home services players across India. “Services are ancillary to whatever you do; when you buy a house, you need a plumber, electrician or pest control. So it is better to tie up with real estate players. Similarly, when you buy a TV on an e-commerce platform you need someone to install it,” Rao said, explaining LocalOye’s strategy.
The firm has also opened up its service partner app to other players in this space based on monthly subscription.
Started in 2013, LocalOye offered services in more than 90 categories across home services, education services, beauty services, health and fitness services, event planning services and online consultancy services. It claims to work with more than 4,200 partners across services and has serviced more than 5 lakh customers. The company has operations in Mumbai, Bangalore and Delhi-NCR region.
Last year it had raised $5 million (Rs 31 crore) in Series A round of funding from Tiger Global Management and Lightspeed Venture Partners. In 2014, LocalOye had raised an undisclosed amount in angel funding from Sidharth Rao, co-founder, Webchutney; Haresh Chawla, former group CEO Network 18 and currently a partner with private equity firm India Value Fund Advisors; and Sachin Bhatia, co-founder, MakeMyTrip.
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