In its fourth acquisition within 12 months, Quikr acquired another startup, home services provider Zimmber for USD 10 million in an all-stock deal in a bid to strengthen its home category.
Besides UrbanClap and Housejoy, Quikr is one of the few well-funded companies in this space. Last year, it went on an acquisition spree after the company approved the total investment of Rs 250 crore just for its home services business.
It also acquired hyperlocal services startups Zalosa, Zapluk and Stayglad, last year. Zimmber too was on a healthy growth trajectory with three acquisitions – Dhulai, FindYahan, and Glamnfit – in a matter of 10 months.
Post the acquisition, co-founders Amit Kumar and Gaurav Shrivastava will continue to be a part of the company management.
Neil Shah of Counterpoint Research said the hyperlocal services space has been gasping for breath with several new startups vying for the same customers.
“The cost of acquisition was as high as Rs 300 for each user. It is practically unsustainable for a boot-strapped startup,” he added.
UrbanClap also faced huge expenses resulting in mounting losses of nearly Rs 60 crore on revenue of Rs 2.8 crore in FY16. High cash burn has also led several startups to shut shop.
Doormint, a Mumbai-based laundry services startup, closed down in September. Another home services firm Taskbob shut its operations in January this year after it failed to raise fresh funds.
Zimmber, which was founded in 2014 by Anubhab Goel, Gaurav Shrivastava, and Amit Kumar, managed to raise over USD 5 million from venture capitals and angel investors.
But high cash burn eroded the capital soon. The company found it difficult to raise funds later because of low returns in a highly crowded market, an analyst requesting anonymity said.
UrbanClap, on the other hand, has raised about USD 35 million, while Amazon-backed Housejoy has raised funds to the tune of USD 27 million to date.