The sordid saga of a $300 million-funded startup going bust in India

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It was on the fateful day of August 17 that AskMe shocked the tech industry by shutting down. It seemed as if the digital-listings and ecommerce startup, with US$300 million in funding and touted to be on its way to becoming a unicorn, went spiralling down overnight. But in fact, the firm’s troubles began much earlier.

Its top management had kept the lid on the business falling apart. The suspension of business was never formally announced, leaving scores of employees still waiting for their salaries and vendors for their dues. This is the saga of AskMe’s downward spiral.

AskMe got distracted from its listings business when the ecommerce scene started heating up in India, a former senior official in the company who did not want to be named told Tech In Asia.

“We had a good product in hand. We wanted to make it the Yelp of India. But somewhere in the middle we realized that things weren’t transparent. There was resistance from top management if we tried to change things. The venture wasn’t being run professionally,” he said.

“The final product was nowhere near what we wanted.”

The second avatar

AskMe was the second avatar of Getit Infoservices, which was founded three decades ago to list sellers of goods and services in the form of a directory. It went online in 2010 when Astro Entertainments Networks, a subsidiary of Astro Overseas, invested close to US$15 million in Getit. In March 2013, it acquired Infomedia Yellow Pages and AskMe from the Network18 group. The company then wanted to leverage its small and medium enterprise database and use it for an ecommerce platform called AskMe Bazaar.

It was burning cash to the tune of US$10 million per month

Getit took up the humongous task of bringing the millions of India’s unorganized small vendors in its fold. These are merchants who had no formal catalogue to vouch for, no standard pricing, and no organized inventory.

“It was hard to train these sellers and educate them on using an online marketplace. The fact that they will not get the money in real-time was one of the big issues,” another senior employee said. The vendors had no delivery module, so Getit had to step in to get the goods to its consumers, which meant higher cash burn, the source added.

AskMe employees protesting outside their office for unpaid dues

Email troubles

What gave away AskMe’s financial trouble was an email sent on August 17 to “select” employees by Anand Sonbhadra, the group chief financial officer of Getit Infoservices that runs AskMe.

The mail directed these employees to disable transaction and payment options on the websites. The mail was leaked to other employees and thus started a panic reaction to possible bankruptcy.

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