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Nandan Nilekani-backed B2B commerce company, ShopX, has shut down operations as it could not generate enough cash flow and is in default of multiple loans that it took from its investors, including Infosys co-founder Nilekani and Singapore-based Fung Group’s investment arm, FSX PTE LTD.
The company has filed an application for initiating corporate insolvency, citing lack of funds. ShopX operated an e-commerce platform for the sale of various products and services by third party suppliers to wholesalers and retailers.
No success
According to the company’s insolvency application, ShopX has considerably reduced its employee strength to ensure that there is no other recurring payment obligation.
“Since the business model has not succeeded, it has not been able to generate enough cash flow from operations. The company has tried various options to meet its payment obligations including raising of additional equity, sale of assets, sale of business etc, but is not able to achieve any success,” ShopX noted in its insolvency application.
During the period of its operations, ShopX took loans estimated to be over $50 million from Nilekani and FSX PTE. LTD. It is now required to make quarterly interest payments to its lenders which it has defaulted.
On Monday, ShopX issued a statement that “the unpaid loan and interest obligations of the company are limited to its main shareholders”. The company said, “It became unviable to operate at scale given the low margin profile of the industry, and hence we took the hard decision to close the business.”
“As the company wound down its operations, the paramount focus of the company and its shareholders was on respecting the company’s obligations including those of the employees which were cleared in full, in spite of the difficult financial condition faced by the company,” the statement added.
App taken off PlayStore
ShopX android mobile app has also been taken down from the Google PlayStore as of August 22 evening.
Founded in 2015 by Amit Sharma and Apoorva Jois, ShopX started as an online B2B commerce company and later moved to an e-commerce enablement business model. The company had also launched a savings app for consumers to get cashbacks, rewards and discounts of their local purchases. In 2021, the company reportedly laid off employees. According to the company’s LinkedIn page, it has 51-200 employees. Till now, ShopX is estimated to have raised more than $50 million from investors like Nilekani and FSX.
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