News: AskMe shuts its business, lays off 3500 staff

Entrepreneurship

AskMe shuts its business, lays off 3500 staff

Astro Holdings which owned 98.5% stake in the company has refused to participate in the next round of funding.
AskMe shuts its business, lays off 3500 staff

 AskMe, the hyperlocal e-commerce company has decided to close all its operations effective immediately. It has laid off over 3500 employees without any salary as the company is facing a severe cash crunch since the investor Malaysia-based Astro Holdings defaulted on payments of sellers, own employees and other dues.  According to sources, the bills had amounted to more than Rs 100 crore or $15 million from January 2016. 

Astro Holdings which owned 98.5% stake in the company has refused to participate in the next round of funding.  In February this year, the company had talked about its plan to raise $200 million from other investors at a valuation of $1 billion. 

Reports on Astro Holdings exiting from AskMe business have been doing the rounds for quite a few months. Manav Sethi, group chief marketing officer and head of digital strategy, AskMe Group had earlier confirmed to Business Standard that Astro Holdings might be exiting the company. "It has been a problem for foreign investors to invest in Askme because of charges made by the Central Bureau of Investigation against Astro Holdings. Astro Holdings also was unable to provide fresh capital," he said.

A few months back the company saw resignations of more than 650 employees across its 40 offices in India. Most of the employees who were let go were in the annual salary bracket of Rs 2.5 lakh-Rs 6 lakh. In the recent crisis, the employees haven’t been paid for the last two months which have made matters worse. "The management has been shopping for other VCs but no one has shown any interest. More resignations may follow," an employee had said in a report earlier.

Getit Infoservices, owned by Malaysian billionaire T Ananda Krishnan's Astro Holdings, is the majority shareholder in the Askme Group, which owns Askmebazaar, Askmepay, and Askmefin. In 2013, Astro Holdings acquired Infomedia YellowPages and AskMe from the Network18 Group.

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Topics: Entrepreneurship

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