What was Zaarly's original concept?

Zaarly launched as a "reverse marketplace" where buyers could post requests with a price ceiling and let sellers compete to fulfill them. The concept premiered at SXSW 2011 and raised $1M in seed funding in just days.

How many times did Zaarly pivot?

At least three major pivots: from reverse marketplace to general local services gig platform, then to a home services focus, and finally to a vetted local business directory model targeting licensed and insured service companies.

Why couldn't Zaarly scale its final model?

The vetted business directory model had genuine consumer appeal but required building density market by market. By the time Zaarly validated the model in Kansas City, competitors were well-established nationally and investor appetite for a third pivot was exhausted.

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// HALL OF FLAME · STARTUP AUTOPSY

Founded	2011
Closed	2020
Country	USA
Sector	Marketplace
Total raised	15
Collapse type	Silent Shutdown

Zaarly

$15M

RAISED

—

EMPLOYEES

108

MONTHS

marketfitSilent Shutdown

Quiet closure with no public announcement

// Fatal mistake: Hyperlocal market density never achieved in sufficient geographies to justify expansion investment

Key Events Timeline

2011-01

FOUNDING

Zaarly founded at SXSW 2011 as a reverse marketplace where buyers post needs and name prices

2011-03

FUNDING

$1M seed funding raised at SXSW launch event

2012-06

PIVOT

First pivot: reverse marketplace model fails due to buyer-seller liquidity mismatch and inefficient pricing discovery; shifts to forward local services marketplace competing with TaskRabbit

2014-2015

PIVOT

Second pivot: repositions as platform for verified home service businesses only, requiring providers to be licensed and insured companies rather than gig workers; gains traction in Kansas City but struggles nationally

2020-06

SHUTDOWN

Silent Shutdown: Zaarly ceases operations after nine years unable to achieve national scale in fragmented local services market

🔥 Hall of Flame 42%🏆 Hall of Fame 8%

Zaarly launched at SXSW 2011 as a reverse marketplace: buyers could post what they needed and name their price, inviting sellers to respond.

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More Marketplace →More from USA →More marketfit failures →Raised: 15

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// THE MARKETPLACE GRAVEYARD DOESN'T END HERE

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