Matrix Partners-backed home services startup Housejoy, which last raised funding in December 2015, has reportedly laid off more than 40 employees across its departments to check mounting cost structures at a time of slow revenue growth.
Citing an industry insider, the report said that the startup has showed the exit route to employees at mid-management levels across its digital marketing, technical and back-end operations teams.
Housejoy, which last raised $23 million in Series-B lead by Amazon, in December’15, is also on verge of shutting down its categories that offer little or no unit margins such as specialized lifestyle and health services.
Additionally, according to one of Housejoy employee cited in the report, the startup is looking to turn the platform to a marketplace model and gradually reducing its exposure to operationally-intensive categories. The company would now focus mainly on fulfillment categories such as beauty and selective home services (handyman services) that enable a transaction model.
Moreover, the startup had also explored a potential sale to OLX India, Quikr and UrbanClap in the past two-three quarters, but the talks did not materialize, said the report citing a person aware of the negotiations.
Housejoy is now looking to focus on categories where it can provide service through the platform, thereby increasing scope for revenue accruals rather than just leadbased services where the cost of acquiring a customer is much higher than the revenue earned.
Industry experts peg this operational burn to have further increased in this financial year with Housejoy struggling to raise funds for last three years.
To recall, Housejoy has made its first acquisition when it bought online laundry services player , at an undisclosed amount, in February 2016.
In August 2016, Housejoy has launched the first of its kind Geo-Targeted technology in all 8 cities it operates, and at that time Housejoy website and the app also unveiled refreshingly new look with captivating content , transparency in pricing and clear information on services offered from the start to its completion and various customizations available for all its 12 categories of that time.
The online services market in India crossed $70 million in 2017 and at a compound annual growth rate of about 60%, the market is expected to grow to $300 million by 2020, according to Redseer Consulting.
In January 2017, Mumbai based home & beauty services startup Taskbob, owned by Crenovative Ideas, had to shut down its operations as the startup failed to raise fresh funds for one year.