[YS Exclusive] Fashion discovery startup Wooplr halts operations, looks to get acquired in the next two weeks
Bengaluru-based fashion discovery and social commerce startup Wooplr, which has been struggling to find investors, has shut down operations due to the lack of sufficient capital.
Sources within the startup confirmed this development on the condition of anonymity. YourStory also reviewed an email sent by Wooplr to its community partners, suggesting a pause in operations. A source from Wooplr also said the startup has stopped taking orders since mid-April this year.
The decision was made by the board keeping in mind the limited capital in the startup’s coffers. Wooplr was founded in 2013 by former McAfee employees Arjun Zachariah, Soumen Sarkar, Ankit Sabharwal, and Praveen Rajaretnam. Subsequently, Praveen and Soumen left the company in 2016.
Wooplr Co-founder Arjun Zachariah didn’t immediately respond to YourStory’s queries on the matter at the time of publishing this article. We will update the article with Wooplr’s response.
But other sources close to the matter point to what may have gone wrong for the startup.
“Wooplr’s biggest cost at present is the technology backend and logistics. So it continues to spend extensively on its technology backend integrated with Google and logistics partner Delhivery. Cash-on-delivery is a massive aspect to manage, and is not really sustainable,” sources told YourStory.
The platform, which has been looking at an acquisition since April this year, is looking to close it in the next two weeks, another source familiar with the matter told YourStory. The platform is said to be in advanced talks with Gurugram-based commerce platform LimeRoad as well as Chinese ecommerce platform Club Factory, including some of its own competitors.
Deals negotiated with LimeRoad and Club Factory would be an ‘acqui-hire’, where Wooplr could operate as a separate brand identity, sources said, adding that the startup, if aqui-hired, would help these platforms in their expansion to newer segments.
Since April, Wooplr has made massive job cuts — primarily operational roles and those in cataloguing division, while holding on to its core leadership team. YourStory was unable to ascertain the current team size at Wooplr.
The employees, who were asked to leave have been provided one month's salary as severance package, another employee told YourStory. The same source added that the company was also considering filing for 'bankruptcy' as an option.
Earlier, Wooplr had turned down an offer from Snapdeal, which, a source said, was a cash-and-stock deal.
“However, the founders didn’t find that the right deal and thought that the cash committed to as a part of the deal was not enough to even pull Wooplr’s operations,” the source said.
The founders of Wooplr
It all started last year, when Wooplr set out to close its Series C round, which pegged the startup at pre-valuation of $80 million.
Media reports suggested that the Bengaluru-based startup was in active talks with China-based CDH investments to lead its $20 million, Series-C round.
However, YourStory learnt from sources that were part of Wooplr’s fundraise efforts that while leading talks with the company, CDH investments was also assessing a deal with competitor Glowroad.
“They were also working out a deal with Glowroad, which we were not aware about,” added one of the sources quoted above.
Glowroad, which connects resellers directly with raw material suppliers using social media services such as WhatsApp and Facebook, eventually received $10 million in Series B capital, led by CDH Investments, last April.
Until now, Wooplr has raised more than $15 million from Helion Ventures, Sistema Asia, Astarc Ventures, and a couple of high-profile angel investors, including Ankit Nagori and Anand Chandrasekaran.
Sistema Asia, among other investors, failed to raise a new fund and this in turn affected Wooplr’s prospects of follow-on rounds.
“Wooplr failed since it couldn’t find the right fund to back itself in the later stage. Even the critical investors were not ready to back the company, for follow up rounds. And later lost interest completely,” stated an ex-employee of Wooplr.
In March 2018, YourStory reported about Wooplr changing its strategy. Calling it an ‘influencer commerce platform’, the startup was looking to empower influencers to earn money by enabling them to start their online stores.
In June 2018, the startup also closed a Rs 3.5 crore venture debt round with Trifecta Capital.
According to VCCircle, Wooplr also raised a venture round of $2.5 million from Helion Ventures in April, last month. However, there was no official announcement from the company side.