US-based home cleaning service Homejoy will shut down at the end of this month, despite raising $40m from investors including internet company Google, according to a company blog post on Friday.
Founded in 2012, Homejoy operates an online platform stretching across 35 cities in the US, Canada, UK, Germany and France, through which users could book certified professional cleaners.
The company raised $1.7m in seed capital from Andreessen Horowitz, First Round Capital and various angel investors before securing a combined $38m in series A and B funding in 2013 from Google Ventures, the corporate venturing unit owned by Google, Redpoint Ventures and First Round.
Although Homejoy was already facing challenges regarding growth and revenue, CEO Adora Cheung told Re/code the primary factor in the decision was the four ongoing lawsuits it is fighting concerning the status of its workers as either employees or contractors, which made fundraising extremely difficult.
Unlike Uber, which is dealing with legal challenges along similar lines, Homejoy did not have the extensive capital reserves required for a long-running legal battle. It had agreed some funding, Cheung added, but it was insufficient for the company’s needs and so had to be declined.
Homejoy reportedly entered talks to be acquired by domestic services booking app Handy in May this year, but no subsequent information about the prospective deal has been released.