ShopX, a Bangalore start-up backed by Nandan Nilekani, has filed for bankruptcy after its business model failed. According to filings with the Registrar of Companies, ShopX has filed for insolvency and bankruptcy under Section 10 of the Insolvency and Bankruptcy (IBC) code with the Register of Company(ROC).
According to Entrack, the audit also stated that because ShopX’s business strategy failed, it was unable to produce sufficient cash flow or attract fresh financing.
The company took multiple rupee loans from its Singapore-based investor, Fung Investment, but was unable to meet its payment obligations (interest on loans) due to lack of funds.
The Bangalore based company, ShopX, has played an important role in co-creating the E-B2B business. Given the industry’s low margin profile, it has been financially unviable to run at scale over time, prompting the decision to shut its operations. The company’s loan and interest liabilities are limited to its principal stockholders.
The company has significantly decreased its workforce to guarantee that there are no further recurrent payment obligations.
As of August 22 evening, the ShopX Android mobile app was also removed from the Google Play Store.
Entrackr ShopX Bankruptcy Tweet:
Exclusive: Nandan Nilekani-backed ShopX files for insolvency and bankruptcy.
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Exclusive: Nandan Nilekani-backed ShopX files for insolvency and bankruptcy
✍️ @upadhyay_harsh1 and @Kunal_POV https://t.co/NC3NgpxRie
— Entrackr (@entrackr) August 22, 2022
