From fledglings to unicorns, many new-age businesses which struggle with high cash burn and weak unit economics are scaling down as angels and venture capitalists have turned their backs on them. Mypacco.com is the latest start-up which has cut down its operations due to the funding drought.
The online courier service start-up is restructuring the business and has decided to discontinue the home-to-home online courier service.
Launched in September 2014, the online aggregator and price comparison platform for courier services will focus on the small and medium enterprises (SME) sector to be able to keep the business afloat for now.
While industry sources had told dna that Mypacco could possibly be winding up business, founder Mukesh Agarwal said that it's the home-to-home courier service that will be discontinued.
"Service cost for home courier part of the business was very high. We could not get enough funding to continue that business. Hence, we had to cut costs. As a result, we are discontinuing the home-to-home courier service," said Agarwal, adding that there could be other players like Flipkart who might get into home-to-home courier business in the future.
During an interaction with dna in October 2015, Mypacco co-founders Vinay Bhartia and Mukesh Agarwal had said that their services will revolutionise the way couriers are sent or received.
"We also believe that we would engineer this change just as makemytrip.com did for travel, Uber and Ola did for taxi hiring, OYO did for room reservations and bookmyshow.com did it for entertainment related products.
Couriers being a basic necessity these days, technology will force the customers to adapt their buying patterns.
"Finally, it is the convenience that will matter. So, in case of a son who is studying abroad, or sending a gift to your loved ones, the user should get the comfort of booking online and enjoy the free home pick-up of your parcel.
Our unique combination of online and brick-n-mortar infrastructure will help offer total comfort to the user while also saving on courier costs to the tune of 15% to 20%," the co-founders has said.
However, that's a thing of the past now as Mypacco will only cater to the small and medium enterprises (SME) sector going forward. According to Agarwal, the management is still trying to find a way to be able to make the business sustainable.
"These are difficult times and everybody is focussing on cost cutting. While new developments with the business will happen, my view is that it will take some time," he said.
The increased pressure on Mypacco business also saw its co-founder and chief executive officer Vinay Bhartia quit the start-up in November 2015.
"He wanted to go to a more secured environment and has joined some other company," said Agarwal.
Having quit Mypacco, Bhartia has joined Chinese e-commerce company Alibaba.com starting March 2016. According to Bhartia's profile on the professional networking platform Linkedin.com, he is senior vice president – strategic partnership at Alibaba.com.
Interestingly, in June 2015 Mypacco had partnered Alibaba as part of its Trade Facilitation Center (TFC) initiative, which is a business-to-business platform for global wholesale trade, offering a one-stop solution for small and medium enterprises (SMEs) to meet their needs in finance, credit and logistics. Through the TFC, Mypacco also offered freight forwarding, customs clearance, documentation, warehousing, transportation and 3PL services to Indian SMEs.
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