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Bangalore-based business chat app Lookup, which is backed by the likes of Biz Stone and Teruhido Sato, has been acquired by NowFloats

A pessimistic global funding environment has forced an Indian entrepreneur to sell his two-year-old startup.

Lookup — a free business chat app founded by Deepak Ravindran and backed by the likes of Twitter Co-founder Biz Stone, Beenos Founder Teruhido Sato and Khosla Impact — has been acquired by NowFloats, a company that helps Indian small and medium businesses (SMBs) to have an online presence.

The transaction details remain undisclosed.

As part of the deal, employees of Bangalore-based Lookup have join NowFloats, which is headquartered in Hyderabad.

Lookup was started in 2014 by Ravindran, a serial entrepreneur and Co-founder of offline search engine startup Innoz Technologies. The startup helps users to chat with local stores for reservations, product and price enquiries. Consumers get guaranteed answers from their local businesses within five minutes.

Last October, Lookup raised US$2.5 million in Series A funding led by serial investor Vinod Khosla’s personal fund Khosla Impact. Twitter Co-founder Biz Stone, Narayana Murthy’s Catamaran Ventures and Global Founders Capital had also participated in that round.

“It was very difficult for us to raise follow-on funding as India is going through a big funding crunch, so we decided to sell Lookup,” Ravindran told e27. “We had many acqui-hiring offers from different companies. However, we decided to go ahead with NowFloats, which wants to further develop our product,” he added.

Started in 2012, NowFloats is a startup that aims to enhance the local online discovery of SMBs. It helps SMBs to get discovered locally, using its ‘location-based SEO’ technologies.

For multi-location companies and online directory services, it can white-label and customise products and provide omni-channel solutions to help increase SMBs’ market and grow their business.

A Microsoft Ventures incubatee, NowFloats is backed by Omidyar Network, Blume Ventures, Hyderabad Angels and Mumbai Angels.

“Nowfloats is the pioneer in SMBs discovery, with over 245,782 businesses using them to create an online presence. We are amazed by their strong focus on b2b and how they have consistently grown and scaled the business in past four years,” Ravindran said in a blog post. “Together, we aim to become the biggest and the most trustworthy platform for SMB’s in India and other emerging markets.”

According to Ravindran, the current funding crunch shows that India as a startup market is maturing. “In the last few months, Indian consumer-facing startups such as Grofers and PepperTap received massive amounts of funding. However, unable to raise follow-on funding, they had to either pivot business model or restructure the business. Now, only the fittest will survive in the market. This funding crunch is part of a course correction,” he said.

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