Startups are often in the news for good reasons: such as a great business idea, a unique and convenient new service that people take enthusiastically to, remarkable success for the founders within a short duration and so on. But sometimes startups get into the news for unfortunate reasons: resounding failure, unethical dealings, sexual exploitation/ molestation, etc. Stayzilla is another startup that started off well but lost its way probably because of competition; it is now in the news for the arrest of this founder Yogendra Vasupal. We look at Stayzilla's timeline and the reasons behind the recent arrest.
Described as an alternate stay aggregator, this Chennai based startup was once thought of as one of the most successful to have emerged from the city. The company claims to be India's largest homestay network; and functions in much the same way as Airbnb.com. It started out as Inasra.com and then rebranded as Stayzilla in 2010.
By 2014, the service featured about 15,000 stays across 1100 cities and was reportedly processing about 500 bookings a day. In 2015, the mobile app was launched and about $20 million raised in a Series B funding.
Though the website is still operational and queries do yield results, all stays featured are tagged SOLD OUT. In February 2017 the company announced that it was suspending operations and would restart using a different model. According to reports, the company had been in trouble for quite a while prior to this.
Co founder of Stayzilla Yogendra Vasupal was arrested in March 2017 on charges of cheating an ad agency called Jigsaw to the tune of Rs 1.72 crores.
While Jigsaw claims cheating, Yasupal says it is a matter of deficiency of service from the ad company. There is also the matter of a property dispute with a politician, who is the landlord of the premises from which Stayzilla operates. According to Yasupal, there is proof of assault and a verbal threat to kill. These clarifications were issued by him via a blog post. Another co-founder of Stayzilla, Sachit was also threatened via this doll with a picture of Sachit’s son.
Many in the startup world have rallied around in support of Stayzilla and its founders. One view is that this is seen as a civil business dispute which is being presented as a criminal matter in order to intimidate and possibly extort. An informal movement called #SaveYogiSaveStartupMovement has been started to try and deter such strong arm tactics against startups.
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