AppsDaily is dead. The Mumbai-based company, according to an investor report accessed by The Ken, is currently in the process of selling off its assets to repay its dues. The mobile protection (insurance and anti-virus) company, which was one of the first to pioneer the online to offline (O2O) strategy in India, stopped operations a few months ago, according to former employees.
AppsDaily was founded in 2008 by brothers Arun and Ajay Menon. Over the last nine years, it raised almost $30 million from marquee investors such as Kalaari Capital, Ru Net, Qualcomm Ventures and Zodius Technology Fund. The company had 1,500 employees on its rolls and 4,000 people on contract as feet-on-street sales agents at its peak. It had a presence in over 100 cities and had the likes of Samsung as an exclusive partner.
Settling the dues
Currently, according to multiple former employees, there are around 2,000 employees whose dues have not been settled (The Ken could not independently verify these claims). The complaint book on the internet is overflowing. And former employees can’t get hold of the founders.
The Ken sent an email to Arun Menon, but it bounced back. Repeated attempts to get in touch with Menon over the phone failed. Vani Kola of Kalaari Capital, one of AppsDaily’s investors, wrote to The Ken saying that she had quit the board a while ago and did not want to comment.
One of the reasons AppsDaily’s fall stands out is because it was among the first to try the O2O strategy to sell apps and services. And it was successful for a while as well. A lot of other marquee startups followed its path. The likes of PepperFry and Lenskart perfected it, but AppsDaily could not. Where did it all come apart?
So limitless and free
To understand where AppsDaily failed, it is important to know how it worked and why it was a bright shining light in 2015.
Started in 2008, AppsDaily burst into the scene at the right time. The Menon brothers were bang in the middle of the smartphone boom. Today, Indians don’t want desktops, the phone is the preferred device for accessing the internet.
But take your mind back to those heady days. Back then smartphones were a novelty and customers needed a way to ensure that they were safe. While buying your gleaming new phone from the store, the sales agent would ask: “Do you want to buy insurance for your phone? What if you lose your phone? What if it is stolen? What if you crack the screen? Imagine the cost to repair! What is Rs 500 more when you have already spent Rs 10,000?” And you would say, “Yes, it seems like a good idea.”
The sales agent would direct you to another person. He is a fast talker. He turns on wifi, keys in the password, and downloads an app: AppsDaily. He logs you in, fills up forms for you. Now, you are insured. Along with the insurance, do you want an anti-virus?
“Customers came from the desktop generation and anti-virus was important. So, they say yes,” says a former employee who asked not to be identified as his current company doesn’t permit him to talk to the media. Let’s call him employee 1. Now, that anti-virus costs another Rs 200. The AppsDaily sales agent asks: would you like a few hot shopping or food apps? Free of cost. Why not? Let us have it!
You’ve now paid Rs 10,700 for a phone, got insurance on the phone, an antivirus, free new apps without spending on data. What a steal. Wait, there is more. This AppsDaily has more apps. It has a news app and a cricket score app. Happy customer, she tells her friends. The popularity of this product grows.
Behind the scenes, the forms you just signed have New India Assurance on it. A reputable and reliable company. “You see, you paid for the AppsDaily app, the insurance came ‘free’. This was so AppsDaily wasn’t under the purview of Insurance Regulatory and Development Authority (IRDAI),” employee 1 says.