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Livspace, a design and renovations firm, finds itself in the midst of negativity – customers, vendors, and ex-employees livid about failed promises and lack of accountability

Livspace is unfortunately not living up to its name; this Bangalore-based start-up finds itself facing a severe backlash from its customers, vendors, and even ex-employees.

So what has happened for Livspace, founded in July 2014 as a home interior design and renovation platform in India with nine branches covering all major cities, to find itself in the middle of such negativity?

As per sources, the primary reason for complaints and disappointments is commitments that have not been honored, resulting in many of its customers, vendor partners, and ex-employees smarting over the lack of accountability and unprofessionalism shown by the start-up.

The customers’ complaints and woes are majorly in the area that Livspace had committed to design and renovate their homes; however, even after going beyond budget (in many cases), their homes are incomplete, almost in shambles, and unrecognizable.

According to these disgruntled lot of customers, they have alleged that Livspace, which promises to take the hassle out of the complex and tiring process of home interior work and renovation by offering an end-end, one-stop-shop alternative by bringing all the involved parties – vendors, designers and furniture suppliers on one platform has not lived up to what had been promised to them.

Many of these customers are left smarting with the unprofessional approach and attitude of Livspace, incomplete and substandard work, and in most cases, despite vast amounts of money for the same already been shelled out by these customers to Livspace.

Livspace’s Appeal

Livspace, with its one – shop – one-stop approach and platform, found many takers, especially from office goers who cannot be continuously available to oversee the works of carpenters, laborers, electricians, designers, and such while either renovating or getting their house done up.

Hence, Livspace found major appeal as all they had to do according to this start-up is to tell the assigned person what they want to be done, and the appointed person takes over and oversees the work process.

What went wrong with Livspace?

While the promises on paper and via its team sounded great, it, in fact, turned out to be a nightmare for those who sought the company’s services.

  • Many of the customers were fleeced out of their money – and found that they had to spend almost triple of the budget quoted with no work done. 
  • The customers found themselves in the dark with a lack of communication and clarity on the part of Livspace.
  • Many clients had to forego their money and switch to other parties, and worst of all, despite Livspace having a refund policy, these clients never got their money back and have no hope of recovering the paid amounts.
  • Exceeding the handover date by large and handing over unsatisfactory work and not delivered as promised to the respective clients is another reason for the clients’ negativity.

Even the vendors that worked with Livspace have their saga to tell. 

  • Many vendors have communicated that amounts in lakhs of rupees owed to them have not been paid; in fact, for some, the dues extend to several years. 
  • They were further frustrated with the attitude of Livspace. The latter would coerce them to finish another project for them to receive the money owed to them.
  • Even the freelancers who are employed by the company as design partners have a similar story to recount. And the start-up is now blocked by several of designer groups.
  • Some have even gone a step ahead and issue a standard warning to fresher not to join Livspace, recounting their own experience with the firm.
  • Many also have stated that Livspace promotes the design partners as salespersons, and they are asked to convince the customers to pay the amount in advance. 
  • If these deals are not secured by the design partners, because the project can extend over several months, they do not get paid at all as Livspace does not offer any base compensation!!!
  • The designers, especially the freshers, are lured in because they are desperate for work and leads. However, the experience that they garner is beyond their wildest imagination.
  • Also, the employees both that have worked with them and also the current lot have stated that the problem is that Livspace follows a commission-based incentive structure, and once the firm collects the money, whether the work is completed or not is not a priority anymore.
  • There are also serious allegation against Livspace for forging bills and accept under – the – desk payments to show their superiors maximum profit.
  • Employees have been left in a lurch following the covid -19 pandemic, wherein the firm has refused to release funds to its 450 employees laid off in March this year, citing lack of funds due to the current pandemic outbreak.

Livspace Facts

Livspace was founded by Anuj Srivastava and Ramakant Sharma in 2014; from hereon, the company introduced its own private label of modular kitchens, wardrobes in three cities – Bengaluru, Mumbai, and New Delhi. It soon launched its home design automation platform for interior designers; it later opened four offline design stores with virtual reality in cities – Bangalore, Delhi, Gurugram, and Mumbai and later announced its expansion in Hyderabad.

A string of acquisitions and investments in Livspace

Livspace has been very lucky when it comes to investments and angel funding in the firm.

  • Livspace, in 2014, raised US$4.6 million from investors Helion Venture Partners and Bessemer Venture Partners.

 

  • In July 2015, it declared that Gokul Rajaram of Square would be taking on a special advisory role in the start-up and also made an angel investment.

 

  • In August 2015, the start-up raised another $8 million in its Series A extension funding round from existing investors.

 

  • In August 2016, Livspace raised US$15 million as part of its Series B funding.

 

  • In 2018, the company raised an additional $6 million investment as part of the same round.

 

  • In 2018, the company secured US$70 million in its series C round led by TPG Growth and Goldman Sachs.

Livspace made a hattrick in 2015 with the acquisition of three firms – DezignUp, Dwll.in, and floor.

Livspace and its business model

When a customer approaches the design and renovation company, Livspace assigns a designer and a manager for that particular project. Once the design and the budget have been finalized, a third-party vendor is picked up by Livspace; he is in charge of all the interior work and corresponds with the designer to execute the contract in line with the customer’s needs.

Livspace promises a tech-enabled idea, wherein the company promises to deliver in “45 days” with a “100% in – house team”.

What does Livspace management say?

The management has denied all such allegations and cited them as “malicious in nature.”

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