Several startups that grabbed decent attention two-three years ago have now gone haywire. Weak product, flaw in execution and inability to raise follow-on capital led many promising upstarts to dwindle into oblivion.
One such startup is Chandigarh-based Jugnoo.
During 2014-16 period, the company was posing as a challenge to Ola and Uber with its on-demand three wheeler-hailing services. However, when deep-pocketed Ola and Uber entered the segment, Jugnoo started facing perils.
Despite the criticism it receives for losing the plot, Jugnoo has improved revenue and controlled losses in FY17.
While the company’s revenue has grown in FY17, it posted a loss of Rs 17.39 crore for the year. When we compare with previous fiscal, it controlled losses by 29.5 per cent. Jugnoo posted a loss of Rs 24.65 crore in FY16.
The company’s revenue increased by 91 per cent to Rs 5.14 crore in FY17 from 2.69 crore in the preceding fiscal, reveals recent RoC filings with Ministry of Corporate Affairs (MCA).
The analysis of revenue and loss figures shows that Jugnoo had lost approx Rs 6 to make a single rupee. Importantly, it spent over Rs 14 to earn Re 1 in FY16.
Jugnoo also controlled overall expense by 17.5 percent to Rs 29.22 crore in FY17 from Rs 38.1 crore in the previous fiscal. Employee benefit emerged as the highest expense for it in FY17. The company spent Rs 14.45 crore during the period, a figure higher than revenue itself.
Jugnoo certainly had created a category (auto rickshaw on demand) and also ruled it for a couple of years in cities like Delhi (NCR), Chandigarh, and Indore amongst others. However, in the past two years, the company lost the lead to Ola and Uber. The company appears to have scaled down operations in many cities.
Besides autorickshaw-hailing service, it also runs on-demand logistics service Fatafat. The company is also struggling to find takers for the logistics service. According to Crunchbase, Jugnoo had raised $16 million total risk capital from Paytm, Snow Leopard and bluechip angels including Rakesh Mathur, Junglee.com co-founder.
Recently, Jugnoo has forayed into Singapore market with a different product, a reverse-bidding system. It essentially enables freelance drivers to bid for commuter requests. Since the company is struggling in its core market (India), it would be interesting to see how its offshore ambitions fare up. Furthermore, the financial performance for FY18 remains to be seen.