Shark Tank Featured Plus Gold Shuts Down, Due to Fund Crunch

Plus Gold, a digital gold savings startup that appeared on Shark Tank India approximately a year ago, has ceased operations.  The startup halted its operations after raising more than $1.2 million from prominent VC firms and angel investors, including Acko’s Varun Dua, due to an inability to secure additional funding, as reported by its cofounder and former CEO Veer Mishra to media.

“Even though there was considerable user traction and initial success, the company encountered an extended funding drought. It became impossible to maintain high operating costs without new capital,” he stated.

Plus Gold, established in 2022 by Mishra and Raj Parekh, functioned as a full-stack platform aimed at enhancing the accessibility of gold savings and investments.  The app allowed users to save in digital gold with either flexible amounts or fixed monthly SIPs.

The Plus Gold app, accessible on both the Google Play Store and Apple App Store, enabled users to convert their savings into cash or jewellery, offering additional benefits of up to 5%.  The app was downloaded more than 1 lakh times on the Google Play Store.

The startup collaborated with Augmont for its digital gold offerings and relied on ICICI Lombard for asset security.

Although Plus Gold has completely ceased its main operations, its app remains active for end users.

“The Plus Gold brand and product have already found a new home.  To guarantee ongoing service for users, we have successfully moved the Plus Gold app and customer infrastructure to a reputable digital gold provider…  The new operator will formally disclose details about the acquiring entity at an appropriate time.  “However, this was not an acquisition of the company itself, but rather a transition of the brand and platform,” Mishra said.

It is worth mentioning that some Plus Gold users have expressed dissatisfaction regarding difficulties they have encountered when trying to withdraw their deposits from the application.  A Reddit user reported that, in spite of several tries to take money out of the app, he was unable to finish the process.

However, Mishra stated that no investor funds are locked on the platform; all funds are securely backed by gold holdings, and customers have full access to withdraw or sell their gold through the app as they normally would.

The main reasons for Plus Gold’s failure were the high cash burn and the capital-intensive nature of the business.  An investor in Plus Gold, Venture Catalyst, had a spokesperson inform Inc42 that the management of the VC firm is actively looking into opportunities and potential deals that could help reduce the impact and recover value for its investors.

Last June, Plus Gold secured $1.2 million in a seed funding round led by JITO, with participation from Venture Catalysts and The Signal Group’s investment arm, Signal Ventures.

Mishra stated that the startup experienced promising initial investor interest and obtained several term sheets for its Series A round.  Nevertheless, a confluence of elements—capital markets becoming more stringent, changes in investor priorities, and larger macroeconomic ambiguities—caused postponements and ultimately the dissolution of those commitments, culminating in the downfall.

Thus, yet another startup focused on digital gold savings has closed down.  The Ahmedabad-based startup GoldPe, which had backing from 100X.VC, closed down last year because of problems with cash flow, a flawed business model, and the lack of a sustainable revenue stream.