Indian homestay network

General Information
In 2005
Business Failure
Business Outcome
Shut Down
By 2017
Cause of Failure
Lack of Focus
Founders & Employees
Number of Founders
Name of Founders
Rupal Yogendra, Sachit Singhi, Sachit Singhi, Yogendra Vasupal
Number of Employees
Between 251 And 500
Number of Funding Rounds
Total Funding Amount
Number of Investors

Stayzilla was a successful homestay network in India and it raised $33.5 million in funding. Yogendra Vasupal, the founder, launched the company, under the name Inasra Technologies, in 2005. He then changed the name to Stayzilla in 2010, because the owner wanted to expand his services in all the cities and Zillas (Districts) in India. The company was an early Airbnb business type that provided an online platform in which homestays, ‘alternative stays’, as well as hotels could be listed. Stayzilla had over 15000 stays in about 1100 cities across the country and in 2013 it reached the 500 bookings in a day milestone.

Cause of Failure

Throughout its 12 years of
operation, Stayzilla had to deal with a varied number of challenges.

The potential for a
business like Stayzilla was huge, especially because they were among the first
companies in India to venture into the sector and make use of technology.
However, being the first mover meant also that people were not very familiar
with the concept, nor how to take advantage of the service and basically many
didn’t even know how to use the internet. So Stayzilla’s first efforts and
resources had to be directed towards both educating the market as well as
essentially creating homestays.

As more competitors joined
the market, various companies tried to differentiate themselves by offering
frequent discounts. But Stayzilla’s operations costs were already too high and
they were losing money every year. The CEO also mentioned that they had also
lost focus on the essential mission they had envisioned for the company.

The company has not been
declared officially closed, though, as the CEO considers this a pause to regain
clarity and plans to return on the scene with an improved service and a ‘clean
slate’ soon.

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