Friday 13 September 2019

Online retailer, Stalkbuylove, runs out of cash as funding tap goes dry

Online retailer, Stalkbuylove, runs out of cash as funding tap goes dryBENGALURU/MUMBAI: Stalkbuylove, a women-focused online retailer, has run out of cash as the company faces a funding crunch, said two people with knowledge of the development.

Customers, fashion influencers and vendors for the etailer took to social media platforms to protest against the founders of the company for allegedly absconding without clearing dues and halting deliveries. Customer complaints on social media can be traced back to June this year, alleging orders were not being processed and delivered even after taking money.

According to people aware of the company’s operations, trouble began six months ago when the ecommerce firm was faced with a cash crunch after a financing round that was likely to be led by a German fund fell through.

Online retailer, Stalkbuylove, runs out of cash as funding tap goes dry“They should have scaled down operations and cleared dues and payments, instead they decided to continue their operations,” an employee told ET, requesting anonymity. This executive also added that the company faced significant pricing pressures and growth issues after Chinese ecommerce firms such as SHEIN and Club Factory took away market share.

ET had reported in its May 29 edition on how smaller ecommerce players such as Voonik, Craftsvilla, Wooplr, Jaypore, Elanic and even the likes of ShopClues are shutting shop, pivoting their business model or opting for an outright sale.

Founded in 2012, Stalkbuylove was backed by the likes of venture capital fund Kalaari Capital, 500 Startups and Germany based Littlerock. It has been unable to pay its vendors, customers or influencers. The startup had raised $10 million in its lifetime. It also raised debt of Rs 6 crore from Trifecta Capital through non-convertible debentures in 2017. Before which, it raised capital worth Rs 36.2 crore at a valuation of Rs 143.4 crore. Kalaari Capital led the round with an investment of Rs 26.8 crore. “Since then, Kalaari has participated in a bridge round but not any more,” said a person directly aware of the matter.

An emailed query to Stalkbuylove did not elicit a response till press time.

Founders blame investors for putting them in a ‘tight spot’ Trouble spilt in to the public domain when social media posts caught momentum recently when fashion influencers started complaining that they had not been paid and the founders, Tushar Ahluwalia, Rashmi Ahluwalia and Shikha Ahluwalia, had stopped replying to their calls or texts. Two such influencers, Komal Pandey and Roshni Bhatia, called the company out on photo and video sharing social networking app Instagram, tagging the company's founder Shikha Ahluwalia on the posts. Both reported that after months of delay, the company has finally refused to pay them for branding assignments that they did for Stalkbuylove .

“The company has refused to pay us for assignments that we did months ago and not just us, there are many bloggers, photographers, stylists who have not been paid. The customers have also not received deliveries of their orders,” said Bhatia. In Ahluwalia's response on Instagram, she said the company's lead investor had put them in a ‘tight spot’, which hinted at a fund squeeze that the startup has gotten itself into.

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