# VIPDükkan (2010 – 2013)

- URL: https://girisimcikafasi.com/en/startup-graveyard/vipdukkan/
- Sector: E-commerce
- Country: Turkey
- Total funding: $5 million
- Cause of closure: Ran out of cash

## What did it do?

VIPDükkan was a members-only flash-sale site that sold branded products to its members at a discount through short-lived campaigns. It was remembered as one of the first private shopping sites in Turkey. It built its own logistics centre and tried to win members through television advertising.

## Why did it shut down?

According to what co-founder Oğuz Şenol told Webrazzi, ePlanet Capital, which owned roughly half the company, did not want to invest in a new round. When no investment could be found from other sources either, the founders concluded they could not carry on under the competitive conditions in the sector and decided to close. Şenol said many companies in the private shopping market were in a similar position but survived by continually raising new investment. According to a 2017 round-up by the Turkish news outlet Habertürk, the closure came at a time when revenues were falling and operations were getting harder; the company could find neither new investment nor a partner.

## The story

Founded in 2010, the year private shopping sites took off in Turkey, VIPDükkan was one of the first players to offer branded goods to members at a discount through short-lived campaigns. In June 2011 it received $5 million from ePlanet Capital. In Webrazzi's 2011 market review, the company's post-investment focus was described as member acquisition.

The investment quickly turned into traffic. According to comScore data shared by Webrazzi, in October 2011 VIPDükkan ranked fourth among private shopping sites with 2.07 million unique visitors, behind Markafoni, Limango and Trendyol. The company was spending heavily on advertising, including television, and building its own logistics centre. In November 2012 a second round of undisclosed size came from ePlanet Capital, raising the fund's stake to 47.82 per cent. Chairman Oğuz Şenol was planning innovations for the sector in 2013. According to a 2016 round-up by the Turkish magazine Turkishtime, VIPDükkan had reached close to 4 million members before it closed in 2013, and ePlanet had paid $5 million for a 28 per cent stake in the first round.

In mid-2013, however, rumours of a closure began circulating in the ecosystem. Speaking to Webrazzi on 1 July 2013, co-founder Oğuz Şenol confirmed the process. As he explained it, ePlanet Capital, which owned roughly half the company, did not want to join a new round, and no investment could be found from other sources. In a market where competition was so fierce, there was no way to carry on. Şenol added that many companies in the private shopping market were in a similar position but kept going by continually raising new investment.

Habertürk's 2017 round-up of e-commerce sites that had closed noted that VIPDükkan could find neither investment nor a partner at a point when revenues were falling and operations were getting harder. In a Bloomberg HT report on the closure of Markafoni, a supplier said he had lost money at VIPDükkan, a sign of the marks the closure left behind.

VIPDükkan's story shows how quickly a growth model accelerated by investment can grind to a halt when the investment tap is turned off.

## Lessons

- If you depend on a single institutional investor, have a back-up plan in case it decides not to join the next round.
- In a model that grows through expensive customer acquisition, growth stops when the flow of investment stops.
- If everyone in your sector is constantly raising money and your own unit economics are not solid, you will be the first to reach the end.

## Sources

- [Private shopping site Vipdukkan.com is closing](https://webrazzi.com/2013/07/01/vipdukkan-kapaniyor/)
- [Vipdükkan receives a second round of investment from ePlanet Capital](https://webrazzi.com/2012/11/22/vipdukkan-eplanet-capital-ikinci-tur-yatirim/)
- [October Visitor Numbers for Private Shopping Sites According to comScore](https://webrazzi.com/2011/11/21/comscore-ozel-alisveris-ekim/)
- [Turkish e-commerce sites that closed before Markafoni! Why did online shopping sites close?](https://www.haberturk.com/ekonomi/teknoloji/haber/1517700-markafoniden-once-kapanan-turk-e-ticaret-siteleri)
- [Why did Markafoni close?](https://www.bloomberght.com/markafoni-neden-kapandi-2018229)
- [50 failed start-ups and 50 lessons from their mistakes (1-15)](https://turkishtimedergi.com/dijital-girisim/50-basarisiz-startup-ve-hatalarindan-cikarilacak-50-ders-1-15/)
- [Private shopping sites that closed before Markafoni](https://webrazzi.com/2017/06/01/markafoni-kapanisi/)