ShopX backed by Nandan Nilekani files for insolvency and bankruptcy
The road for e-commerce enabler ShopX appears to have come to an end as the company is set to close its doors. The Bengaluru-based company has filed for insolvency and bankruptcy with the judicial authorities.
The bankruptcy filing is unsurprising as the company transitioned from its base model to an e-commerce enabler platform in mid-2021.
The Board of ShopX has passed a special resolution to file an application under Section 10 of the Insolvency and Bankruptcy Code (IBC), 2016, according to documents filed by the company with the Registrar of society (ROC).
Founded in 2015, ShopX had a similar model to Udaan until June 2021, when it offered an assisted e-commerce solution that included procurement, supply chain and a line of credit for five years. However, the model did not work and the company changed course and also laid off over 50% of its employees in June.
Coach had exclusively reported the pivot and the layoff last year.
According to regulatory documents, ShopX has taken several rupee loans from its Singapore-based investor, Fung Investment, and is unable to meet its payment obligations (interest on loans) due to insufficient funds. The company also added that since the business model has not been successful, it has not been able to generate enough cash flow or raise new capital. As a result, it is unable to meet its various payment obligations and has ceased to be a going concern.
Queries sent to Fung Investment and ShopX co-founder and managing director Amit Sharma elicited no response. We’ll update the story in case they respond.
Backed by Nilekani and Fung Investment, ShopX has raised over $54 million to date and was valued at over $100 million in the last round. Nilekani alone invested $18 million in the company founded by Sharma and Apoorva Jois.
ShopX’s struggle might be evident from the fact that the company has failed to score a new round since April 2020, a time when most startups in the b2b e-commerce and e-commerce enablement space have collectively raised over billions of dollars.
Following the pivot, ShopX also tested the consumer internet space with the launch of a cashback app that offered MRP discounts and reward points for every UPI payment purchase [via its app] in any local store and its partners.