- Company — Homejoy
- Sector — On-demand home services marketplace
- Founded / Died — 2012 / 31 July 2015
- Lifespan — ~3 years
- Capital raised — ~$40M (Google Ventures, Redpoint, First Round, Max Levchin)
- Peak scale — ~$25M revenue in 2014 (reported); 33 markets across the US, UK and Germany.
- Stated cause of death — The company blamed four pending worker-misclassification lawsuits, saying they made fundraising impossible. Co-founder Adora Cheung cited "unresolved challenges in the home services space" (Forbes).
- What it built — On-demand home cleaning booked through an app, staffed by independent contractors.
- Evidenced cause — The starkest stated-vs-evidenced divergence in the library. Christina Farr's Backchannel reporting established that only ~25% of customers returned after month one and fewer than 10% after six months, while the company bought customers at $19.99 on Groupon knowing, per three former employees, that "most of these people never used the service again." Cleaners netted ~$15/hour and churned heavily. The lawsuits were real and did block the Series C — but a business with sub-10% six-month retention and negative paid-acquisition economics was already dead. The legal framing was true, convenient, and not the cause.
- Warning signs visible earlier — Retention cohorts were measurable from 2013. Expansion to 30+ markets happened before retention was fixed — the textbook scaling-before-PMF error. Acquisition talks with Handy and Helpling failed on liability, not on business quality.
- Money outcome — Investors lost ~$40M. Employees and contractors dispersed with little notice. Cheung joined Y Combinator as a partner and later served in the US Office of Science and Technology Policy — see Part 9.
- Post-mortem quality — Poor from the founders; excellent from journalism. No candid founder account exists. The definitive document is a reporter's.
- Transferable lesson — A regulatory event is often the proximate cause of a shutdown and rarely the sufficient one. Healthy companies survive lawsuits. Ask what the retention curve looked like before the subpoena.
- Sources — Farr, Backchannel, "Homejoy at the Unicorn Glue Factory" · Forbes · BuzzFeed News
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