Stayzilla founder Yogendra Vasupal gets bail, finally

Asked to deposit Rs 40 lakh in a week; relief comes after two previous bail pleas were rejected

The Madras High Court has granted conditional bail to Yogendra Vasupal, one of the founders of online accommodation aggregator Stayzilla, almost four weeks after he was arrested by the police on a complaint filed by one of his company's vendors, Jigsaw Advertising and Solutions.

Vasupal has been asked to deposit Rs 40 lakh with the Magistrate Court in a week's time. The relief comes from the High Court after his bail application was dismissed by a Special Metropolitan Court and a Principal Sessions Court.

The Court has earlier suggested both the parties to go for mediation, since it is a dispute between two business entities. While Jigsaw was open to mediation, Vasupal's lawyer said that they were not interested, said sources.

Vasupal was arrested on March 14 on charges of cheating after Jigsaw complained that dues of over Rs 1.69 crore were not paid by Stayzilla, after it suspended the vendor's operations.

Various industry bodies had earlier thrown their weight behind Vasupal and sought the government's intervention in securing his release. Leaders of various industry bodies such as CII Start Up Council Chairman Kris Gopalakrishnan and Nasscom Executive Council Member Ravi Gururaj had urged the authorities to release Vasupal and emphasised the urgency in laying guidelines on business closures.

Over 1,000 entrepreneurs including former Infosys board member T V Mohandas Pai, Paytm founder Vijay Shekhar Sharma and Ola Cabs co-founder Bhavish Aggarwal, in a letter to Union Home Minister Rajnath Singh which was published in help-yogi.com, had sought justice for Vasupal. The founders were concerned about the manner in which Vasupal was arrested and the alleged influence used to ensure he was harassed by officials in Chennai.

Stayzilla had decided to halt operations in February and said it was looking at a different business model. According to sources close to the development, the company was looking at pivoting to a B2B model where it would offer services to the online accomodation aggregators.

"All Yogi wanted was a complete restructuring (reboot) of Stayzilla and had begun discussions with prospects in the accommodation and tourism space. He even attended a travel summit in Delhi in the 2nd week of March to begin his discussions on the reboot. He was in the process of liquidation of assets that were not generating revenue and focus on vehicles which had a good opportunity in the current system. Company was also in the parallel process of collection from debtors and other pay offs," wrote co-founders in the blog.

The company has raised $34 million in four funding rounds from Nexus Venture Partners, Matrix Partners and others.