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BuyAsOne closes shop

Boby Kurian

Rukmini Priyadarshini

BANGALORE, Feb. 21

PORTENDING the dotcom carnage in India, BuyAsOne.com, a popular B2C portal, closed operations today.

The consumer demand aggregation portal and Synesis Online, its promoters, have cited inability to pay their dues as the reason for the closure.

Ms Hema Parameswaran, CEO, declined to comment when contacted though she did not deny that the dotcom had to close operations: ``Officially, we have no stance on the issue and we neither deny nor confirm it''.

Synesis online had obtained funding of Rs 5.25 crore from Punj Lloyd Ltd. The company had looked to raise another Rs 5 crore last quarter. Industry sources suggested that the second round of funding may not have materialised leading to the closure.

The BuyAsOne promoters expected to start making profits in two years' time. In fact, this was first of the four portals which Synesis was planning to set up by 2002.

According to a leading venture capitalist, many of the dotcoms were poorly funded and ``while they might generate revenues, they are cash-flow negative businesses. That is, they need to continue to be funded until their revenues outpace their expenses. O therwise they cannot survive.''

Many other dotcoms, especially B2C portals, are said to be either lying low or on the verge of collapse because of their inability to raise subsequent rounds of funding.

BuyAsOne.com has been endorsed at many fora as a dotcom that not only tapped the power of the Internet but also had a good business plan and a revenue model in place.

BuyAsOne's USP was that it would pass on a part of the savings of wholesale-type prices to online buyers of a range of products. The larger the number of buyers registered with it and participating in a purchase, the greater would be the discount that co uld be negotiated with the marketers.

It had entered into alliances with about 17 marketers across several product categories ranging from colour televisions to mobile phones to jewellery.

Mr Uday Punj of Punj Lloyd, who is a director on the board of Synesis Online, headed the technology and procurement function. He also heads the broadband ISP SpectraNet Ltd, which is in the final stages of takeover by the Bharti Group.