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- 💀 Doomsday for Vaniday (before 2020)
💀 Doomsday for Vaniday (before 2020)
How Vaniday expanded to more than 5 countries within a year — and shut down (before it was relaunched).
Admond Lee
June 16, 2024
Hey Founders,
Welcome to The Runway Ventures — a weekly newsletter where I deep dive into failed startup stories to help you become the top 1% founder by learning from their mistakes with actionable insights.
💅🏻 Today’s story is about Vaniday — the once-promising beauty and wellness platform in Singapore.
It’s worth noting that Vaniday was acquired and relaunched in 2020. The story in this article is based on what happened before 2020.
Let’s get to it! 🚀
Today at a Glance:
☠️ 1 Failed Startup → Vaniday
⚠️ 2 Mistakes → Unsustainable business model
🧠 3 Lessons Learned → Profitability > Growth
🔗 The Runway Insights → How Mailchimp’s founder bootstrapped to a $12 billion exit
💰 Southeast Asia Funding Radar → BayaniPay raises $3M for global payment service
☠️ 1 Failed Startup: Vaniday
🚀 The Rise of Vaniday
Backed by Rocket Internet, Vaniday was founded by Maxime Legardez in 2015 as an online platform to help users discover and book beauty and wellness services.
It aimed to be the ultimate destination for beauty junkies, offering a wide range of services from haircuts to spa treatments.
The Problem — Customers struggled to find and book beauty and wellness services as it was often a cumbersome process.
Customers had to make phone calls with limited information about service providers.
The Solution — Vaniday streamlined the full process by allowing customers to find, compare, and book beauty and wellness services through its online platform.
🙌🏻 It was a win-win for everyone
Customers — They could search for services based on location, budget, and preferences, read reviews, and book appointments online.
Salons — Service providers could promote their services and find new clients at scale.
 | 💅🏻 Basically, Vaniday was like a marketplace connecting both supply (salons) and demand (customers). 🔄 The more users used Vaniday to find and book services, the more service providers wanted to be onboarded — and vice versa. |
💰 At its peak, Vaniday raised 15 million euros with a significant user base. Vaniday never stopped there. Instead, it quickly expanded to other countries like Brazil, Australia, and Europe.
With a growing number of users and partners, Vaniday was well-positioned to dominate the beauty and wellness industry. The future looked bright, but was it?
📉 The Fall of Vaniday
Little did Vaniday know that the doomsday was looming. Internally, Vaniday faced many challenges that eventually killed the company.
📌 Here’s what happened to Vaniday:
2015 — Vaniday was initially launched in Brazil before expanding to other markets, including Singapore.
Secured funding and partnerships with salons and spas.
Grew and expanded rapidly.
2018 — Saurabh Chauhan replaced Maxime as the new CEO.
Dec 2019 — Vanity shut down in Singapore and exited other markets (Australia, Italy, UAE, Russia, and Brazil).
💸 Reasons? Financial difficulties and unsustainable business model.
😧 Vaniday hadn’t been profitable since it ran on cash from its investment in 2015.
Jul 2020 — Vaniday was reborn in Singapore.
🌅 It was restructured and relaunched under new leadership. 2 main changes were made:
Cost — Cost structure was optimised
Revenue — New business revenue streams were added to offer B2B solutions and services, including tech, finance and marketing solutions.
📈📉 Once again, Vaniday’s story is another classic example of a startup that soared high but fell hard (before it was relaunched).
The idea was brilliant. The problem was real. Yet, the company couldn’t sustain its growth due to a flawed business model and financial mismanagement, not to mention the intense competition in the beauty and wellness industry.
Want to learn more about Vaniday’s downfall?
⚠️ 2 Mistakes
Mistake 1: Unsustainable business model
Vanity relied heavily on promotions and discounts to attract users, which eroded profit margins and made it difficult to achieve profitability.
🌏💸 Despite substantial investments, the cost of expansion and operations outstripped its revenues. For example, Vaniday started in early 2015 and then expanded to more than 5 countries by the end of 2015.
The result? Vaniday’s financial losses became higher and higher. It came to a point where it couldn’t operate without additional funding.
🪓 And when Vaniday realised it was in deep trouble, it quickly scaled back its operations and exited other markets except Singapore (before eventually shutting down in Singapore a few months later).
🤑 Profitability > Growth
In short, gone are the days when startups could get easy money from investors, grow at all costs, and hopefully they could hit profitability after they’ve dominated the market.
Mistake 2: Timing and leadership changes
💃 Overall, Vaniday had 2 leadership changes throughout its operation.
However, Vaniday was relaunched when the COVID-19 pandemic happened, leading to additional setbacks and making recovery difficult. Despite the tough period, Vanity was successfully relaunched with an optimised cost structured and new business revenue streams.
🧠 3 Lessons Learned
Lesson 1: Profitability > Growth
Raising money to grow rapidly is cool.
😎 But you know what’s even cooler? Generating revenue and growing at your own pace. I believe this should be the default way of running businesses.
Unless your company is capital-intensive (i.e. hardware business), chances are you won’t need a huge amount of money to get started and grow.
🌟 Key Takeaways:
Ensure your business model can stand on its own two feet without constant external funding.
One common way to get revenue in the early stage is to run as an agency model by providing services to customers.
Starting with a service-based approach helps you understand the problems that your customers are facing.
After serving 5-10 customers, you can then productise your service by building software since you know what features to build.
Most importantly, you already have existing customers to pay you at a cheaper cost once the product is ready.
🏆 Big win for your customers, big win for you.
Remember, service first, then product.
Lesson 2: Strategic and controlled expansion
Expansion is inevitable if you want to grow your business. However, expanding for the sake of expanding is dangerous as it increases your overhead, which is what happened to Vaniday when they expanded to more than 5 countries within a year.
🌟 Key Takeaways:
🌏 Ensure your core markets are solid before expanding.
Localise your product with effective go-to-market strategies
One of the biggest challenges when expanding across Southeast Asia is localisation.
For example, the market in Singapore could be very different compared to Indonesia or Thailand in terms of go-to-market strategies, target audience, problems, and workflows.
🤝🏻 If possible, try to partner with local players as joint ventures to help you expand and go to market easily.
This is especially true when you’re in markets where businesses are done based on relationships instead of merits.
Lesson 3: Adapt to market changes quickly
The only constant in business is change.
Every day is different. So be prepared for market changes and unexpected surprises.
⛈️ Nobody expected COVID-19 to happen. It did, and it caught every business off guard. Many businesses died, and those that survived were the ones that adapted to market changes quickly.
🌟 Key Takeaways:
Crises are bound to happen. It’s just a matter of time before the next disaster comes.
The solution is to prepare your roof before the next storm hits.
Have contingency plans in place for unexpected events.
🔗 The Runway Insights
💰 Southeast Asia Funding Radar
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That’s all for today
Thanks for reading. I hope you enjoyed today's issue. More than that, I hope you’ve learned some actionable tips to build and grow your business.
You can always write to me by simply replying to this newsletter and we can chat.
See you again next week.
- Admond
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Disclaimer: The Runway Ventures content is for informational purposes only. Unless otherwise stated, any opinions expressed above belong solely to the author.
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