JackThreads and Stayzilla are the latest VC-backed companies to lay off employees and move toward closing down the current iteration of their services.
Online menswear retailer JackThreads has laid off most of its staff and is in talks to sell the company, according to Fortune. JackThreads spun out from Thrillist Media in 2015 at the same time as the joint company received $54 million in VC funding; the portion that went to JackThreads was led by Oak Investment Partners and SBNY. Since then, the New York-based company has burned through cash, per the report, offering services that ultimately turned out to be not so financially sound, like allowing customers to order clothes for free and only pay for what they didn’t return.
Stayzilla, an Airbnb-like company that operates a short-term rental platform in India, is shutting down operations and “looking to reboot it with a different business model,” co-founder and CEO Yogendra Vasupal said in a blog post. Founded in 2005, Stayzilla raised about $40 million from investors including Matrix Partners and Nexus Venture Partners, but the capital apparently wasn’t enough to keep the company going. The startup had already laid off about 400 of its 600 employees, but Vasupal’s blog post said the business wasn’t viable in India’s travel industry landscape.
Stayzilla’s shutdown comes just a few days after online marketplace Snapdeal, another major presence in India’s tech community, laid off 500 to 600 employees. That company had raised more than $1.5 billion and was valued at $6.5 million as recently as last August.
Overall, the last year has been particularly rough on startup employees, with several VC-backed companies announcing significant layoffs and, in some cases, shutting down completely. Last March saw at least four companies—Sonos, Pebble, Shyp and Optimizely—cut down their workforces, and the layoffs have kept coming. Anonymous social app provider Yik Yak and hosting platform company Github both laid off significant numbers of workers at the end of last year.
The trend is continuing into 2017. Food delivery startup Munchery was one of the first startups this year to institute a major layoff, and Joyable, the provider of a mental health platform, shed half its workforce a week later.
Read all of our past coverage of layoffs here.
Article by Dana Olsen, PitchBook