The resolution/insolvency professional (IRP), appointed by the National Company Law Tribunal (NCLT), has sought expression of interest (EoI), or initial plans, from bidders to revive the hotel and homestay aggregator Stayzilla.
As per reports, Karthigeyan Srinivasan, the RP has specified that the bidder should have a net worth of Rs 50 crore or more as of March 31, 2018, and have the ability to infuse a minimum of Rs 20 crore cash in the company. The EoIs must be in by May 16.
Yogendra Vasupal, CEO, and co-founder of Stayzilla said that he will start reaching out to investors and other potential bidders to bid for the asset aggressively.
Stayzilla, despite having successfully raised over $34 mn from investors like Matrix Partners and Nexus Ventures Partners, had shut down its operations in February 2017 due to funding crisis and court cases. The company is estimated to have an unpaid dues of over Rs 1.7 crore.
Under the insolvency proceedings ordered by NCLT, Chennai, a 270-day timeframe was given for finding resolution plan for the company. As per the NCLT order, if no resolution plan is arrived at, the company goes into liquidation post the end of the 270 period. The resolution period for Inasra Technologies which runs Stayzilla ends on July 30, 2018.
Stayzilla would be the first startup being tested under the insolvency and bankruptcy code.
To recall, in March 2017, advertisement Agency JigSaw Solutions, a vendor of Stayzilla, filed a criminal case against the company and its co-founders, alleging a fraud of $265K and cofounder Vasupal was arrested by the police. However, he got bail from Madras High Court after a month on April 11, while cofounder Sachit Singhi got anticipatory bail.
Vasupal had then moved Supreme Court against the insolvency proceedings ordered by NCLT, but it was dismissed by the Supreme Court on March 21.
Also, StayZilla is only an aggregator which may not have physical assets of any worth other than intellectual property so company valuation will be an exciting part to see.
"The company has not been operational for over a year. There are assets, the brand and a pending patent. It is up to the resolution applicant as to how they would look at Stayzilla fitting within their existing boutique of brands," Vasupal said.
India’s travel and tourism industry generated $91.3 billion (Rs 5,949 billion) in 2017, and is projected to double over the next decade, according to a report published by India Briefing. The tourism industry received 6.3 percent of the total investment in India in 2017 – at $41.6 billion (Rs 2,705 billion). Indian technology startups which have introduced a slew of online services and innovative products in the hospitality sector include AirBnb, Makemytrip, Cleartrip, Yatra, Goibibo, and OYO Rooms.