The company, backed by Infosys co-founder Nandan Nilekani, filed an application under Section 10 of the Insolvency and Bankruptcy Code, filings with the Ministry of Corporate Affairs showed.
Its board had passed a special resolution to file for bankruptcy last month.
“Since the business model has not succeeded, it has not been able to generate enough cash flow from operations or raise new capital and is therefore unable to meet its various payment obligations and has ceased to be a going concern,” according to the regulatory filings.
The company said it had tried various options to meet payment obligations, including raising additional equity, and selling its assets and business, but to no avail.
“The board of directors considered and evaluated the situation and are of the opinion that, unless the insolvent status of the company is resolved, there is no availability of business prospects nor any long-term financial resources that presents a financially viable alternative to carry on the business activities of the company,” the filings showed.
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Founded in 2015, ShopX, operated by 10i Commerce Services, started out as a business-to-business (B2B) ecommerce platform helping brands, retailers and consumers connect.
It also provided mobile and web applications to help offline stores and kirana stores (corner stores) go online.
The company has raised more than $56 million since inception and was backed by the likes of Fung Investments.
By June 2021, it became an ecommerce enablement platform, helping fast moving consumer goods (FMCG) brands with their nationwide distribution needs.
In December 2021, the company
forayed into the consumer segment with the launch of a platform that partnered with brands and offline retailers and allowed consumers to discover local stores and offers.
News website Entrackr was the first to report on Monday that ShopX was shutting down.
“While we succeeded in achieving various milestones, 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, “ said the company spokesperson.
The company added that the paramount focus of ShopX 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.”
Digital ledger and bookkeeping solutions provider OkCredit recently laid off 35-40 employees, as it did not see much potential in the kirana-led commerce opportunity, and looked to focus on its fintech offerings, ET
reported on February 23.
However, certain startups are integrating with the government’s Open Network for Digital Commerce (ONDC) infrastructure to provide commerce offerings.
ET
reported on May 12 that fintech firm PhonePe was in the final stages of integration with ONDC.
On August 17, ET reported that the company was looking to
launch a separate commerce app through integration with ONDC to help offline sellers go digital and sell their inventory online.
