Stayzilla
The business, the turning points, and the decisions behind them.
01 / WHAT IT BUILT
What the company did
Stayzilla was an Indian online marketplace for homestays - 'India's Airbnb' - founded in 2005 by Yogendra Vasupal. It built a network of over 50,000 accommodation options across more than 900 towns in India, partnering with state tourism departments on eco-tourism initiatives. The company raised $34 million, including a $20 million Series B in 2015 and a $13 million Series C in May 2016. In February 2017 it halted operations to 'reboot' its business model; the service never resumed, and a month later Vasupal was briefly jailed in a vendor payment dispute that became a national startup-community controversy.
02 / Stayzilla FAILURE REASONS
Failure reasons
Stayzilla was killed by unit economics and competition. CEO Yogendra Vasupal admitted the company had to invest heavily on both sides of the marketplace - creating homestays and guests who would choose homestays - which stretched it thin, and that discounting-based growth rampant in Indian travel since 2015 forced it to match prices so it could not 'even recoup what it put in'. It was badly outgunned: OYO had raised close to $190 million against Stayzilla's $34 million, and while both generated about $2 million in revenue in the last financial year, OYO could absorb $52.5 million in losses while Stayzilla could not. Its plan to raise $40 million failed - it closed only a $13 million Series C from existing backers in May 2016 - and cash reserves ran out. Vasupal also acknowledged mistakes in chasing growth over a sustainable business.
03 / EVENT HISTORY
Events in the structured record
- Company founded
Yogendra Vasupal founded Stayzilla in India as an online marketplace for homestays.
- $20M Series B
Stayzilla raised a $20 million Series B, expanding its homestay network across India.
- Series C falls short
In May 2016 Stayzilla closed only a $13 million Series C from existing backers, far short of its $40 million target.
- Operations halted
In February 2017 Vasupal announced Stayzilla would halt operations 'in its current form' to reboot the business model; in March 2017 he was arrested over Rs. 17.2 million in alleged defaulted vendor payments, sparking the #FreeYogiNow outcry before his release.
04 / CONTEMPORARY REBUILD ASSESSMENT
Difficulty of rebuilding this project today
Material for this section is being gathered and checked. It will appear here once ready.
Overall assessment: Not completed
05 / CAUSAL CHAIN
How the factors connect
- 01
In February 2017 Stayzilla halted operations in its current form to 'reboot' its business model; the service never resumed.
- 02
In March 2017 founder Yogendra Vasupal was arrested on a complaint by vendor Jigsaw Solutions over Rs. 17.2 million (about $260,000) in alleged unpaid dues; investors and the startup community rallied behind him (#FreeYogiNow) and he was released.
- 03
No bankruptcy filing was disclosed; no loss figures or creditor claims beyond the vendor dispute were publicly documented.