Nandan Nilekani-backed E-commerce enabler ShopX has shut down its operations and filed for bankruptcy. ShopX has taken multiple rupee loans from its Singapore-based investor Fung Investment and is unable to meet its payment obligations due to insufficient funds.
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The company also added that since the business model has not succeeded, it has not been able to generate any 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.
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The company is said to have tried various options to meet its payment obligations, including raising of additional equity, sale of its assets, sale of business, etc. but was not able to achieve any success. The company filed an application under Section 10 of the Insolvency and Bankruptcy Code, 2016 last month.
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The company’s spokesperson said, “ShopX has been instrumental in co-creating the e-B2B industry. Over time, it has become unviable to operate at scale given the low margin profile of the industry, and hence the decision to shut down operations. We have focused on orderly and ethical windup, respecting all company obligations. The loan and interest obligations of the company are limited to its main shareholders.”
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The startup provided a retail operating system which connected brands, retailers, and consumers. ShopX used to offer an assisted e-commerce solution which includes sourcing, supply chain and credit line for five years. However, the model didn’t work and the company changed track and also laid off over 50% of its employees in June.
