Stayzilla shutdown takes an ugly turn, co-founder arrested; says he was threatened

Jayadevan PK March 15, 2017

Yogendra Vasupal, the co-founder of travel startup Stayzilla, was taken into police custody yesterday, according to a news report in Times of India. Earlier today, in a Medium post Vasupal alleged that he was being threatened by a vendor (a media buying agency) and also his landlord.

Vasupal had announced on 23 February that the company was rebooting its operations after it ran out of funds. In his Medium post today, he said that the company had been working out of its Bengaluru office for about a year and the landlord turned downright abusive after he learned that they wouldn’t be able to make rent.

“I ignored all those repeated insults to find any common ground with the Landlord. Over multiple meetings he started getting even more agitated demanding immediate payment (for which he had accepted a post dated cheque of March 7th) and became violent,” the post said.

The company registered a complaint against the landlord but the police were unable to stop repeated threats from the landlord. Stayzilla then petitioned the court.

He also said that the police, acting on another complaint which contained “false accusations” harassed the families of the founders. His co-founder Sachit Singhi, was also sent a ‘black magic’ doll in a box with his son’s picture in it as a threat. According to the Times of India report, Vasupal was arrested based on the complaint by advertising agency Jigsaw, which claimed that Stayzilla had defrauded him of Rs 1.72 crore.

Vasupal in his post called the Times of India article which said he “allegedly confessed to defrauding advertising agency Jigsaw of Rs 1.72 cr,” inappropriate. He pointed out that Jigsaw is owned by a person whose son Aditya CS, was a former employee of the Times Group which publishes The Times of India.

Many in the startup ecosystem have come out in support of the founder. “Guys – read and RT – genuine, well intentioned team -backed by solid investors – sad to see the developments : better ways to resolve issues,” angel investor K Ganesh tweeted.

Karnataka’s IT and tourism minister tweeted: Working to see how we can sort out @stayzilla issue with my counter part in Chennai. Will be reaching out to him soon.

An e-mail sent by Aditya to the press says that he has proof that Stayzilla cheated him. “How long will advertising agencies and media houses bear loses because of irresponsible wannabe entrepreneurs who manage to get funding just to live a 5 star life for a few years and then finally shut shop and expect the hard working small time business people to suffer,” Aditya wrote.

He further said: “They cheat us and if the system takes action they cry foul. I AM NOT SCARED of their tantrums, my case is genuine and will fight it in the courts and I trust the courts.”


Update: 15 March 2017, 2.40 PM (IST): This story was updated with inputs from Aditya.