ShopX, a startup backed by Nandan Nilekani, has shut shop and filed for bankruptcy since its business model did not work. The company failed to generate enough cash flow and also found it difficult to raise fresh capital, company filings sourced from Tofler showed.

The startup provided a retail operating system which connected brands, retailers, and consumers. Owning to the cash crunch, it filed an application under Section 10 of the Insolvency and Bankruptcy Code (IBC), 2016, last month.

“The company has been unable to meet its various payment obligations and has ceased to be a going concern. The company has tried various options to meet its payment obligations, including raising of additional equity, sale of its assets, sale of business etc. but is not able to achieve any success,” the company’s filings said.

“Unless the insolvent status of the company is resolved, there is no availability of business prospects nor any long-term financial resources… In the light of the above, the board of directors of the company are of the opinion that corporate insolvency resolution process of the company can be considered the best way forward,” they added.

A spokesperson from ShopX, confirming the development to FE, 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 unpaid loan and interest obligations of the company are limited to its main shareholders,” the person added.

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News portal, Entrackr was first to report the development.

The company was founded by Apoorva Jois and Amit Sharma in 2015 and had raised over $66 million in funding so far. It was last valued at about $175 million, according to Tracxn data. Its investors include Fung Group and NB Ventures, which backs HealthifyMe and Practically and many more.

ShopX competed with the likes of 1K Kirana Bazaar and SuperK, among others. After having remained a largely B2B focused player, in mid-2021, ShopX also ventured into the B2C space, by incentivising customers while they shopped from their neighbourhood kirana shops, by providing cashback and other cash-saving offers.

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The discounts were not just limited to kirana shops. The company’s website shows it rewarded customers anywhere between 5% and 20% on another spending like bike and car-related services, salon visits, grocery, medicines and many more. Overall, ShopX reportedly had tie-ups with over 2 lakh retailers spread across 500 towns and 24 states as of December.