The Gurugram-based startup is shutting down, people in the know said, as demand for transportation services continues to be depressed more than a year after Covid-19 forced millions to avoid non-essential travel and work from home.
Shuttl, which was backed by Amazon, is reported to have laid off a significant part of its team as it finds it unable to sustain in the current situation. Last year too, Shuttl had fired around 40 people and cut salaries to battle the pandemic.
In a tweet thread on Sunday, Shuttl co-founder Amit Singh said the company has taken a “tough but practical call” that takes the best care of its team, customers, partners and shareholders.
“The call is to join forces with another entity. An entity that’s less impacted by Covid & can better tide over these challenging times. We are in serious discussions with some companies, Indian & International, to merge to become a stronger force,” Singh tweeted.
Wrong place, wrong time
— Amit Singh (@amit___singh___) 1624820295000
He did not disclose which are the companies looking to acquire Shuttl or its assets.
Singh did not respond to ET’s queries on the company winding up operations and firing a chunk of its team.
News portal Entrackr
reported the development first, pegging the number of employees being laid off at over 100.
According to Singh, the difficulty began last year with the outbreak of the pandemic and within a week the company saw a dramatic fall in demand as commute was replaced by video calls as people started working from home.
“We kept fighting & experimenting across lockdowns, unlocks, in between waves. As we were getting our act together, there was this second Act of God. The second wave. It was sudden & severe. Companies went from ‘Let’s plan a back-to-office party’ to ‘Let’s wait for till our employees are double-vaccinated’,” he added in a series of tweets.
Singh said these changes forced the company to ‘part ways’ with its team members who are being offered a severance package of three-six months, depending on their tenure in the company.
Founded in 2015, Shuttl raised about $120 million in equity and debt funding, according to startup data platform Crunchbase. Its investors include Sequoia Capital, Lightspeed Venture Partners and Times Internet, the digital arm of The Times Group that also publishes The Economic Times.
The pandemic has had a similar impact on the mobility sector, with startups like ZipGo having to suspend operations.
Even for large ride-hailing platforms like Uber and Ola, it has been tough. After a recovery from the pandemic’s first wave last year, ride-hailing volumes were increasing gradually but have again been hit hard due the second wave. In May, ET
reported, citing RedSeer data, that the mobility sector clocked around 78 million rides in March, 69% of what it had recorded in pre-Covid-19 months in 2019. The sector is expected to see a further drop of 30-40% in demand in the coming months, the report added.
Singh’s Twitter thread said the company’s diversification into Southeast Asia is working as it offers a credible commute alternative to white-collared people in this geography, though on a small scale.