Just after a deal settlement with Amazon, app aggregator Tapzo has announced that October would be the last operational month for the Sequoia-backed company. In an email to users, Tapzo has asked users to settle Tapzo Cash Balance and digital gold before October 31.
Meanwhile, the company already had pulled the plug from all the transactional categories and Tapzo Gold subscription. Failing to raise follow-on capital, it had struck a deal with Amazon. Tapzo founders along with its team have already joined ‘Amazon Pay’ in Bengaluru.
Tapzo used to be a super app which allows users to access more than 35 apps, such as Flipkart, Amazon, Ola, Uber, and others through a single platform.
Since its inception in 2010, Tapzo had gone through three pivots and rebrandings. In its maiden avatar, it was known as Akosha and then it went on to become a chat-based personal assistant ‘Help Chat’ in 2015. A year later, it changed its path to turn into an app aggregator – Tapzo.
So far, Tapzo had raised over $33.5 million risk capital across five rounds from the likes of Sequoia Capital, RB Investment, and American Express among others.
Tapzo journey is over: What lessons it left for entrepreneurs?
For the success of any startup, three factors that matter the most are focus, clarity, and consistency. Undeniably, Tapzo lacked all three fundamentals. Despite raising substantial capital ($33.5 million and three pivots), it failed to find a stable business case.
Even though it made three pivots the company fumbled each time to figure out the right model. It amplifies the fact that pivots can always backfire if not backed by a clear roadmap and proper execution.
Raising capital on a string of buzzwords is easy but building a sustainable business around them is difficult. During 2015, the Ankur Singla-led firm had raised $16.5 million (Rs 100 Cr) on the premise of building personal chatbot. However, soon the company realised that it’s not worth exploring (owing to several reasons like scale, unit economics etc.).
Tapzo’s story is a cautionary lesson for the aspiring entrepreneurs who try to use terms and concepts like Artificial Intelligence (AI), Blockchain, Machine Learning (ML) while interacting with investors, media and speaking at conferences, but without proper knowledge, market research, and a set plan at that.
While these technologies indeed could help in the making of a better product and creating optimistic narratives, words don’t count. Talking is easy but walking the talk is tough. The focus has to be on the latter.