Bengaluru's 10Club faces bankruptcy over business struggles

Bengaluru-based startup 10Club is nearing bankruptcy due to failed business strategies. The company is known for its e-commerce aggregation model, where it merges small brands under one umbrella. Despite raising $40 million in seed funding shortly after launching, it has struggled to adapt to market demands. In recent months, 10Club has experienced significant financial distress. Payments to vendors have stopped, and employees have faced delays in salary payments. The company is discussing the possibility of filing for insolvency, as it consults lawyers and investors. 10Club had aimed to replicate the successful model of Thrasio, which consolidates e-commerce brands, but it has not achieved profitability. As of last year, the company reported a net loss of ₹116.3 crore, a significant increase from the previous year. The startup focused on home accessories and furnishings but faced tough competition from established companies and international brands like Ikea. This made it difficult for 10Club to maintain its market position. Some insiders believe 10Club invested in the wrong brands and failed to properly manage its acquisitions. The company has halted funding for its acquired brands, leading to financial instability. It is also facing potential legal action from the brands it purchased for unpaid dues. Investors are backing away from 10Club, indicating that there is little chance for recovery. The e-commerce aggregation sector has proven challenging, with Thrasio itself shutting down in late 2023, despite a high valuation.