Stayzilla founding team 2014.happy times- image courtesy: YourStory.com

Chennai-based Stayzilla, an alternate and homestay aggregator, has shut operations.Yogendra Vasupal, founder of Stayzilla, in a blog on Medium announced that the company would be halting its operations and is looking to reboot it with a different business model. However, he has not given any time frame for the come-back.

A day ago on Tuesday, Snapdeal, a leading e-commerce marketplace, laid-off about 600 people and shut several offices across the country. It’s founder Kunal Bahl in a mail to its employees admitted that the company’s strategy has gone wrong.

Stayzilla, started in 2007, had about 8000 homestay properties in about 900 towns and had tied up with various state tourism boards in the last one year including Madhya Pradesh, Rajasthan, Odisha among a few others.

However, it was facing a stiff competition from Airbnb, Oyo and Treebo. Besides, it was facing some regulatory issues and had initiated the conversations with Central Government in April 2016 for easing the homestay guidelines.

Vasupal believes specialization could be the future mantra for Stayzilla. “Focusing all our energies on the supply side will allow us to build on our core strength that we have developed over the last 18 months. Specialized solutions such as the concept of ‘Stayzilla Verified Homestays’ excite me in particular. Originally conceived to increase trust, this could serve as the benchmark for the entire nascent and unstructured industry,” he said.

The company’s investors include Matrix Partners India and Nexus Venture Partners. One of the early investors was Indian Angel Network, who had given the company money to scale up in 2012. According to a report‘s, the company has raised about $33 million thus far.

Stayzilla’s losses have jumped four-fold jump at Rs 95 crore for FY 16 as against R19.62 crore a year ago, according to data collated by business research platform Tofler. The company’s revenues also jumped three-fold at Rs. 13.8 crore in the same period from Rs. 4.21 crore in the previous year,

Rebooting of Stayzilla comes at a time when the Indian startups are seeing a shakeout after the funding boom in 2015. In 2016,as many as 212 startups had shut shop,as against 140 in 2015 as investors became vary of the business model and profitability.

Overall, Snapdeal and Stayzilla episodes, though painful, indicate maturing of Indian startup ecosystem.