Exclusive: ZiffyHomes faces an uncertain future as its troubles aggravate

Gurugram-based home rental startup ZiffyHomes appears to have hit a rough patch as it struggles with financial hurdles owing to the pandemic, with its website now returning an error message. 

The company is in its final leg to wind up its operations is what four persons familiar with the operations of the company have told Entrackr. 

“The company has been facing financial difficulties due to COVID since last year, but its perils have aggravated in the past two to three months. Hence, the company had laid off most of its workforce and discontinued lease with properties, ” said one of the sources requesting anonymity. 

However, the company has denied a complete shutdown and said that it has significantly reduced its operations and put on hold any new customer additions and marketing spends. 

“ZiffyHomes has not shut down the operations but reduced its operations in line with the present demand. We still have multiple operating properties with tenants. The company [legal entity] is still active as on date,”  Saurabh Kumar, co-founder of ZiffyHomes, told Entrackr in an emailed statement.  

When asked why its website was not working, Kumar said that it has been down for the last three days because of “certain significant changes in the business flow” and product in line with COVID-19. 

“The customer care is not working as of now as we are not selling any new properties or acquiring new customers at the moment. The operational properties have the manpower to handle all the customers staying at the properties,” Kumar added. 

The clarification by the company does raise a question: how does a tech-enabled service company operate without a website and a customer care unit?

Sources also said that customers and vendors have been running from pillar to post for refunds and payments. This is also evident from the company’s social media walls where people have been pleading for refunds. 

Last year, Mint had reported that the Y Combinator-backed company had deferred payments of several vendors and was finding it difficult to pay for its leased properties amid the coronavirus crisis. 

The company has been facing a backlash from its users to return the tenants’ security deposit too. Kumar acknowledged the issue and said that refunds have been delayed due to the impact on cash flow but the company is gradually issuing refunds.

“There was a huge [impact] on revenues because of significant move-outs in the first wave and the business never picking up post that,” Kumar said.

Besides Y Combinator, ZiffyHomes has raised capital from Trade India’s promoter Bikky Khosla and Anirudh Agarwal, MD of Shree Sharda Group. It also acquired two small companies - Fella Homes and Nivassa Resident - in the national capital region.

While the pandemic has disrupted the operations of most home and office rental startups, New Delhi-based Stanza Living had recently raised over $100 million led by Falcon Edge with participation from existing backers Sequoia Capital and Matrix Partners. 

Entrackr had exclusively reported Stanza Living’s latest fundraise.