On demand economy seems to go through a roller coaster ride in India. The year old phenomenon was fairly hot and sexy for investors till third quarter of the last calendar year. However, the space exposed to some hard realities (mismanagement) and plenty of them wounded their operation. Recent to shut operation, is Delhi based on demand laundry startup – Tooler. The company has stopped taking orders and couple of offline counters in Gurgaon and Delhi also found inactive.
YourStory reached to founders over phone but they didn’t respond. However, Sukanth Srivatava, one of the co-founders of the company confirmed shut down via text message. According to YourStory’s sources Tooler has been trying to raise funds from some time but failed to convince investors for follow-up round.
Earlier this month, Bengaluru-based on demand startup – MyWash was acqui-hired by Amazon funded HouseJoy. Hybrid laundry platform Wassup acquired angel funded Chamak for an undisclosed amount in an all equity deal (no cash involved in transaction) in November last year.
Launched in June 2015, Tooler claimed to handle around 100 orders a day during previous interaction with YourStory. Unlike horizontal service marketplaces, vertical focused on-demand startups have failed to break the barrier of seed or Pre Series A rounds. Market observers believe that lack of scale and poor unit economics are reasons for VCs apathy towards verticals in the on-demand space.
Some of the major challenges in this space are discovery and retention of trusted users, delivering parallel experience and also speeding up the whole cycle of wash, dry and iron which usually takes up about two to three days in totality.
Verticals in the on-demand space is tough to scale up as demand is not consistent. Hyper funded on-demand grocery startups like Grofers and Peppertap also shut operations in a few cities because of poor demand and to curb their burn rate. Besides laundry, beauty and home services are also expected to go through correction. Experts opine that most of the on-demand players don’t have the product market fit and hence down-scaling, layoffs and shut downs are only a natural progression.