In fresh signs of how it has has becoming increasingly difficult for startups in the Indian ecosystem to raise follow up rounds, Frankly.me, the online video microblogging platform which started with an online AMA sort of model with celebrities, and later pivoted to a something more dubsmash of sorts, has shut down operations.
There has been no official confirmation about the same, neither the company has replied to our comments. However sources have told us, that the app is now completely shutdown and all of the remaining employees (the startup laid off 40 employees in November last year) have been let go off.
The reason behind Frankly’s shutdown is the company’s inability to raise a fresh follow-up round in Series A. Frankly.me had been on a lookout for new investors as it had reportedly not received any commitment from its current ones — Matrix Partners (India).
This also gives a fair bit of idea as to how contrasting the ecosystem has become in comparison to the dollar-raining past year. This also is a serious sign beaming out to startups who did mass hirings and unmanageable expansions in lieu of massive backing they received from respective investors last year.
Almost over an year ago, the Delhi-based upstart had made quite some headlines when it raised a $600K seed round from Matrix for a video-based Q&A platform. The platform was almost an instant hit, as it allowed users to interact directly with some of the biggest public figures — including political and Bollywood celebrities.
This is what Nikunj Jain, one of the co-founders at Frankly.Me, had said during the year back fundraise,
We are trying to create a place for more meaningful conversations that have more than 140 characters. We believe YouTube is a great platform for hosting and broadcasting, but it’s not a conversation platform. It’s a one-way communication tool.
Frankly.me started out as a video Q&A platform that served the purpose of connecting people with public figures and raise the level of engagement between them. The upstart had then claimed that many of the VIPs ranging from singers to political leaders have already registered themselves for the service.
The platform’s big break came when it hosted a Q&A with Arvind Kejriwal — the current Delhi Chief Minister who was earlier leading an anti-corruption movement against the then Delhi Government and was a massively popular face among the youth.
However, owing to declining usage of Frankly’s platform — a result of more easy to use and globally recognised similar platforms gaining importance like Periscope and Meerkat — the Delhi-based upstart pivoted to a more dubsmash sort of model. On the Android Play Store, the app describes itself as the “easiest way to create video emojis, bollywood/hollywood movie spoofs, and video memes”.
Well, clearly that hasn’t worked as well.
Frankly.me’s shutdown is perhaps one of the many, we might witness this year. Investors have now become overly cautious of putting in more money in services, which are not reaping much dividends in terms of profits and are simply cash burning ventures for a few initial years of operations.
The best examples of such investor-driven shutdowns could be taken from India’s wobbly hyperlocal delivery segment. Multiple heavyweights — Zomato (food delivery), Peppertap (grocery delivery), Grofers, TinyOwl (backed by Matrix) — among others have gone on a massive layoff drive across cities they expanded during fresh fundraises, but have now found to operate. Most companies are backing off to preserve cash and increase their run rates until a fresh Series A or B comes in.
We have mailed both Frankly.Me’s founders and Matrix Partners for comments, and will get update this story once we hear back.
This is what Frankly.Me’s co-founder Nikunj Jain sent us in an elaborate statement :
We launched franklyMe with the premise of letting people express themselves through videos or, if put simply, “to be the India’s first video only social network”.
There is good news and bad news. Let’s start with the good.
We recently raised a round of funding from new as well as existing investors.. From Arvind Kejriwal to Javed Akhtar a large number of celebrities are using franklyMe to express and interact with their fans through video blogs (more popularly known as velfies or vlogs). While we are not large enough yet to be called a social network, we have a loyal community of vloggers with whom we stay in regular touch. As icing on the cake, our user base is growing because of a unique format similar to Dubsmash.
Time for the bad news.
Despite these early successes, we haven’t been able to achieve sustainable product market fit. While the market seems keen on adopting video to consume happenings around itself, video creation still remains a challenge and probably a problem a little ahead of its time.
About one-and-a-half years later, we are shutting down the application. Yes, you heard it right.
Our team of 35 odd people agree with the decision as all of us are taking a break to recharge ourselves and subsequently work on something bigger. If you are interested in hiring any of the Franksters, you can mail me at [email protected] and I will be happy to help you. I must warn you though, most have already been placed in companies of their choice! The only people left unemployed seem to be me and my co-founder.
Investors will get a big chunk of their money back, we recognise the need to use money raised only towards something we believe in. To make up for the little they lost in dollars, they get the lifetime privilege of being friends with the notorious Nikunj Jain! Just kidding – I am extremely lucky and grateful to be funded by the best. They continue to support us in our endeavor to do the unthinkable, through ups and downs.
We have our shares of successes and failures. Nevertheless as a journey franklyMe has further humbled us as human beings. We used to stay in regular touch with our users in phone and person, but believe the channel could have been more efficient. At some point, we expanded ourselves our thin and timely correction was done yet a small scar remained.
Thank you all for using franklyMe and sticking with us till the end. And don’t believe all the negative press. Kuch toh log kahenge, logon ka kaam hai kehna (people will say all they want to, its their job to say)
We will be back, with a bang. Stay tuned.