Housejoy fires 40 employees, narrows down focus to select verticals

Housejoy

Things appear not to have joyful with home service provider Housejoy. Struggling to raise fresh funding, the Bengaluru-based company has laid off about 40 employees across mid-management functions including marketing, tech, and operations.

The move is likely in sync with controlling burn rate and improving unit economics. The Amazon-backed company is also eyeing to pull the plug from categories which aren’t performing and commercially unviable. It would now focus on two categories – beauty and selected handymen services.

Post-Amazon’s $23 million round in December 2015, Housejoy has been unable to onboard new investors. The Saran Chatterjee-led company also had explored buyout options with Urbanclap, OLX, and Quikr.

Scoring lead over Housejoy, Gurugram-based Urbanclap had scooped up $21 million series C round led by Internet investment fund Vy Capital. It claims to be one of the largest players with almost 7,000 requests every day on its platform.

Entrackr’s sources hint that Housejoy fulfills about 2,500 requests on a daily basis (majorly in Bengaluru).

With the growing dominance of Urbanclap, large incumbents such as Quikr is also facing a tough time. Owing to dismal performance and poor future outlook, Quikr prime backer AB Kinnevik has markdown its valuation by 12 percent during the calendar year 2017.

Following the markdown, it also lost the Unicorn status.

Two months ago, Housejoy was also planning to offer products in beauty and personal care segments. However, it’s yet to start the new business segment.

During 2015, several house service and handymen focus startups have mushroomed to capture $80 billion worth highly fragmented and unorganised home services business in India.

However, only a handful of them survived while many were acquired by Quikr. It had acquired home services startups including Doormint, Zimmber, Zalosa, Zapluk and Stayglad.

With $60 million total funding, UrbanClap has a leadership position in selling home services. The recent firing at Housejoy and markdown of Quikr certainly herald struggling phase for the home service companies.

The development was first reported by ET.

Comments

LEAVE A REPLY

Please enter your comment!
Please enter your name here