Exclusive: O2O startup Shopsity shuts down; founder joins Paytm
Yebhi.com co-founder Danish Ahmed's second venture—Shopsity—also seems to have fizzled out.
Shopsity followed an online-to-offline (O2O) retail model and connected customers to fashion retailers in their vicinity. Its website and app are no longer working.
Moreover, according to Ahmed's LinkedIn profile he has joined mobile wallet and e-commerce firm Paytm as vice president of O2O business.
Ahmed had quit Yebhi.com, one of the early successes in the Indian e-commerce industry, in March last year to start Gurgaon-based Shopsity Tech Pvt. Ltd.
When contacted, Ahmed told TechCircle the company is still operational, but it's building IT solutions for retailers. "There was no need for a front end so the site was shut," he said.
Ahmed also said that another Shopsity co-founder Gaurav Arya is no longer with the company.
Arya has joined Paytm as general manager - sales of the marketplace business, according to his LinkedIn profile.
The reason behind Shopsity's shutdown could not be ascertained immediately, but it is believed that the company failed to raise fresh funding.
Shopsity raised seed funding last year from Sandeep Aggarwal, founder and former chief executive of ShopClues; and Teruhide Sato, founder of Netprice (now Beenos), a global Internet and e-commerce business incubator. The startup was looking to raise next round of funding to expand to other cities. While talking to TechCircle earlier this year, Ahmed had said the company was planning to raise $3 million in Series A round of funding and had initiated talks with potential investors.
When launched, Shopsity was charging retailers a commission on each transaction confirmed over Shopsity. But "that model turned out to be dependent on too many variables", Ahmed told TechCircle in April.
In January, the company moved to a subscription-based model where retailers paid Rs 40,000 to Rs 1 lakh in subscription fees per year for listing on the Shopsity platform along with access to various marketing tools.
With the changes in the business model, Shopsity started making operational profits and was also hopeful of closing financial year 2016-17 with Rs 5 crore in revenue.
Online-to-offline was being heralded as the next big thing in India's rapidly evolving e-commerce space. In 2015, the market saw several brands upping their game in the O2O segment. Several startups also came up that focussed solely on online-to-offline retail model. In fact, India's largest digital wallet player Paytm, in December last year, acquired Near.in in a bid to tighten its hold in the O2O commerce space. Shopsity competed with NCR-based Zakoopi, Fashalot and Shouut, and Bengaluru-based Retale.