Next week, Roomi has announced a $ 11 million new funding, a cash injection that just came when the New York-based residential real estate market hit a magical 1 million user milestone had reached.
That series A round was supposed to drive important national and global expansion – and that was at least superficial. In March, Roomi got a roommate service, Symbi, from New York, before settling on the European markets with the purchase of Study Abroad Apartments. A few months ago, Roomi acquired the Mexican joint rental platform DadaRoom.
Roomi seemed to be healthy and fulfilled his promise to extend the global presence beyond North America. However, VentureBeat received an announcement last week that the startup had fired most of its workforce ̵
In addition, several former VentureBeat employees talked about stories of frivolous spending, nepotism, and an often intimidating work environment.
As a result Last week, Roomi released the following statement from VentureBeat's reports on mass layoffs:
Roomi made the extraordinarily difficult decision to dismiss some employees due to inevitable changes in our financing structure. We want to thank our dedicated team for all their hard work and their contribution to the Roomi mission for more security in the home.
In a separate statement provided to CNN on Friday shortly after the release released a lengthy feature in the startup, Roomi He said one of the reasons for the dismissal was that an expected round of financing had failed. Founder and CEO Ajay Yadav added that it "surprised us all".
However, according to people Close to the situation that VentureBeat raised on the condition of anonymity, the location of the company should not be so surprising to anyone because of the way it spends money.
For example, the entire company embarked on a 10-day 10-day Team Bond trip to Thailand, which Yadav has blogged about. Roomi also spent considerable sums of money, which were available to us for outdoor advertising in New York and London, according to sources in the order of $ 1 million.
A Twitter user has captured the extent of the advertisement, and as you can see From this video, the ads can be found all over this New York subway.
Today at the W4 subway station in NYC, roomi ads are placed everywhere! pic.twitter.com/OVSyhIBzii
– Aditya Nagarsheth (@ANagarsheth) April 29, 2018
As a side effect, not everyone liked the ads.
To see these damn roomi app ads on the subway should be criminalized. I hate them so much
– Nicholas (@ketchupsecret) April 27, 2018
Free saving is not a new phenomenon in the founding world and this activity can sometimes be traced back to naivete or inexperience. It may be reckless, but in itself there is nothing sinister about it.
The fact that investors were unwilling to put more money into the startup could at least be a sign of something more serious. And our sources tell us that Roomi was not as close to completing a new round of financing as it claims. VentureBeat used Inputi's Roomi's A-Lead investor Atami Capital, but at the time of writing, the company has not responded yet. However, VentureBeat has managed to get answers from Yadav.
"True," Yadav said in response to suggestions that Roomi was not near a new round of financing. "As a startup we are always in talks about our financing situation. However, our interactions with investors are confidential. We can not disclose anything publicly as there are legal agreements with investors. "