Youngmonk Technologies Pvt. Ltd, which runs online marketplace for pre-owned cars GoZoomo, has decided to shut down operations as the founders failed to carve out a business model with sustainable unit economics.
Confirming the development, CEO Arnav Kumar said the company has decided to return the remaining capital to their investors. Upon asked how much money is being returned to their VCs, Kumar said while the startup is yet to complete the financial reviews, nearly half of the amount it raised so far will be returned to the investors.
Gurgaon-based GoZoomo has raised close to $7 million so far, primarily from SAIF Partners.
Kumar said the company had 65 employees when it decided to shut operations last month and that it has successfully placed most of them in various positions across organisations. "We have been busy finalising our business processes and placing our employees. Out of the 65 people, we just have four people remaining to be placed," Kumar said.
In addition, the company will compensate employees with seven weeks of salary as severance pay.
The development was first reported by Tech in Asia.
The company had laid off nearly 35 per cent of its employees (130 people) in January this year, barely a year after starting up.
"Restructuring was a strategic decision. We iterated with four different business models over the past two quarters—some were operation-intensive, others product-focused. Currently, product innovation is a major focus and, consequently, we stopped some manual processes that won't scale well," Kumar was reported as saying at the time of layoffs to YourStory, which first reported the development.
In July last year, GoZoomo had raised $5 million from SAIF Partners. Prior to that, it received $1 million in seed investment from SAIF.
Founded in December 2014 by Kumar and Himangshu Hazarika (both IIT Kharagpur alumni), along with Aniket Behera (IIT Bombay alumni), GoZoomo was a mobile-based P2P marketplace that helps users buy verified, cars from individual sellers. It operated in Bengaluru, Mumbai, Delhi-NCR, Pune and Chennai.
It listed cars from verified individuals with its algorithm that identifies individual sellers. The company did manual verifications prior to getting every potential seller listed. GoZoomo also offered various services such as certification, background checks, paperwork, loans and insurance for the buyers.
The trio had earlier co-founded Sokartik, a web app to create visual, narrative stories.
GoZoomo competed with CarTrade, CarDekho, Spinny and Droom in the online used-car business.
In a recent interview with TechCircle.in, Amit Jain, CEO of CarDekho, said the used-car space in India is a two-player market now led by CarDekho and Cartrade, leaving no scope for a third company to establish. "It is a two-player market now. We acquired Gaadi and ZigWheels and Cartrade acquired Carwale. There is no scope left for a third player now. You will have to come up with at least $200 million to make it big in the industry now," he said.
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