The consumer internet search platform AskMe has reportedly suspended its operations,
laying off nearly 4000 employees. The company said t have taken the decision because of severe cash crunch. According to some media reports, its primary investor, Astro Holdings defaulted on payments to sellers, own employees and other dues.
The bills had amounted up to $15 Million from January 2016, and since Astro has 98.5 percent stake in AskMe, the company had to rely on just one source of income, Track.in reported.
The Gurugram-based company’s e-commerce website is still live but is not accepting any new orders. Sources close to the company told inc42.com that this unplanned shut down is because of the equally unplanned exit of its principal investor, Astro Holdings.
Last month, Malaysian billionaire Ananda Krishnan-led Astro Holdings exited AskMe Group, in which it owns 97 percent stake, after a long-drawn battle with minority shareholders. Astro Holdings made its last cash investment of around Rs 150 crore last month.
Recently, AskMe wrote a letter to the Ministry of Corporate Affairs and Registrar of Companies, asking them to ensure that Astro Holdings does not exit the country without meeting its liabilities and commitments.
Recently, AskMe saw resignations from more than 650 employees who were in the annual salary bracket of INR 2.5 lakh-INR 6 lakh. To date, Astro has pumped in $119 Mn (INR 800 Cr) in the company according to filings with the Ministry of Corporate Affairs. It was also in discussions with Alibaba and Baidu to raise $200 Mn this fiscal at $1 Bn valuation, to further revamp its etailing business AskMeBazaar.
Things got worse after the company’s major investors Helion Ventures and Astro held back their interests towards further funding. The Astro back out from a supposed MBO (Management Buyout) scheduled at the end of July this year just added to the downslide.
The shutdown has left more than 4000 employees, vendors, and other creditors at AskMe and the investor, in a state of panic. Earlier this month, an open letter by AskMe’s employees to Astro Holdings also revealed the inside story.
AskMe.com was started as a classified portal in 2010. The company launched its online shopping portal Askmebazaar in 2012, which focused on small and medium enterprises. Later in 2013, AskMe was acquired by Getit.
The portal is associated with more than 12,000 merchants across 70 cities. It also entered the hyperlocal space with Askmebazaar’s next day delivery, and the fintech space with AskMePay’s AskMeFin. The company also invested $20 million in online furniture marketplace Mebelkart in August 2015.