The COVID-19 pandemic has wiped out and upended many businesses especially those in the mobility and hospitality segments. One such company is Gurugram-based Shuttl which has begun winding up its operations and is exploring merger and acquisition opportunities, according to two people aware of the development.
“Shuttl has started shutting down its operations and has laid off most of its employees,” said one of the sources. “The company is left with some funds and eyeing merger and acquisition opportunities with larger firms in this space,” the person added.
Mobility businesses have been hit badly during the pandemic and companies in the daily commute and ride-sharing segment have been affected since March 2020 when a nationwide lockdown was first imposed to stop the spread of the coronavirus.
To confirm and know more about the current status of the company, Entrackr had sent queries to Amit Singh, the co-founder and CEO of Shuttl, on Sunday.
While Singh is yet to respond to our queries, he ran a Twitter thread on Sunday in which he clarified the company’s situation. “We’ve taken a tough but practical call. A call that best takes care of the interest of our team, customers, partners, shareholders. The call is to join forces with another entity. An entity that’s less impacted by Covid & can better tide over these challenging times.”
In his tweet thread, Singh emphasized that the company is in discussions with some Indian and International firms for a potential merger.
Without disclosing the number of people being laid off during the period, Singh said that the company will provide a severance package of 3 to 6 months to those affected.
According to Entrackr’s sources, the number of laid-off employees could go over 100. During the first wave of COVID, Shuttl had laid off over 40 employees and slashed salaries across functions.
Shuttl would be the second company to wind up operations in the organised shuttle space. Bengaluru-based ZipGo had shuttered operations in February 2019 due to lack of funds. Essel Group had promised investment upto Rs 300 crore in the company. However, the Subhash Chandra-led group had backed out from its commitment for some unknown reason.
Since its inception in 2015, Shuttl had raised about $90 million in total equity and debt capital from investors such as Toyota Tsusho Corporation, Sequoia, Lightspeed, Amazon and Dentsu. According to Fintrackr, the company had surpassed Rs 1500 crore in valuation during the last tranche of its Series C round in January 2020.