How Kunal Shah-Backed Mainstreet Hung Up Its Shoes

Mainstreet Marketplace, once a rising star in , is now facing a severe crisis. The startup, which started as a YouTube channel by Vedant Lamba in 2017 and later grew into a major player in the ‘hype-drop’ economy, has seen its operations in Delhi nearly collapse.

Its flagship South Delhi store has closed, along with its warehouse located in Delhi’s Chattarpur shutting shop. This leaves Mainstreet with no physical presence or logistics capability in the capital.

A warehouse visited by Inc42 had zero stock on hand, with just one employee present. “Seven to eight months ago, there used to be three to four employees here, plus a few more in the store. The racks were filled to the brim, with orders coming in every day. But now, everything is gone,” the employee said.

When asked, Lamba confirmed the situation to Inc42. “It’s true that we have shifted our warehouse to Mumbai. We’re facing cash flow problems and were unable to raise money from investors,” he said.

However, he insisted that the startup plans to reopen its store in Delhi. “The area is undergoing redevelopment. Delhi has always been a key market, and it still is. We’re planning to open a new retail location there in the next three to four months,” he added.

According to him, the old warehouse was tied to the previous store, and once that shut down, it made sense to consolidate operations in Mumbai.

Lamba said the team is currently working on a separate B2B studio business to generate cash flow, though he did not disclose further details. But what exactly prompted this dramatic pivot into something altogether different for this once-might sneaker marketplace?

What Happened With The Startup?

At the height of the sneaker mania in 2023, Mainstreet attracted some of the most notable angel investors in India, raising $2 Mn (about INR 16 Cr), following a pre-seed round earlier.

After 2022, it had an enviable list of angels including Zerodha founders Nikhil Kamath and Nithin Kamath, Eternal’s CEO Deepinder Goyal through First Lap LLP, Udaan cofounder Sujeet Kumar, Spotify India MD Amarjit Singh Batra, singer Badshah, comedian Tanmay Bhat and CRED founder Kunal Shah.

Following the funding, Mainstreet Marketplace aimed to scale its operations by hiring a seasoned senior leadership team, increasing its offline retail footprint beyond Delhi and Mumbai.

However, soon after raising funds, the startup began investing heavily in marketing. According to a source close to the management, the startup participated in Zomato’s Zomaland 2024 event soon after raising funding, where celebrities like Badshah collaborated with the startup.

At the time, Mainstreet showcased about 5,000 sneakers, claiming to be the largest marketplace in Asia. However, people familiar with the matter said most of them were supplied by resellers, who were owed money for these shoes. “Mainstreet even bought a few sneakers to showcase at the event, which again cost a lot of money,” said one of the resellers.

Further, the startup’s spending after the fundraising also increased rapidly. According to an ex-employee, a data entry operator in a warehouse was paid around INR 50,000, which is way higher than the industry average of around INR 15,000-INR 20,000.

Another employee said the company was paying rent for a printer for more than a year, which ended up costing the company more than 2X the actual retail price of the printer.

Mainstreet is alleged to have paid fresh graduates a salary in the line of INR 1 Lakh to INR 3 Lakh per month, which was also higher than the industry average.

All this was coupled with a global slowdown in the sneaker industry. The global sneaker industry, while still growing, is showing clear signs of slowing down across several key markets.

The sales of fashion and lifestyle sneakers in the US have dropped about 5.8% after adjusting for inflation, according to research firm Circana.

This decline is part of a broader trend where previously high-growth regions such as Western Europe, Asia-Pacific, and Latin America are now seeing reduced momentum. The sporting goods sector, which includes sneakers, had been growing at a rate of 7% annually between 2021 and 2024, but this has now been revised down to 6% for the 2024–2029 period.

Several factors are contributing to this slowdown. Economic uncertainty and inflation have made consumers more selective in their spending, pulling back on non-essential purchases like fashion sneakers. The sneaker resale market, once driven by exclusivity and fast sell-outs, has cooled considerably. In many cases, supply now outpaces demand, leading to surplus stock and markdowns.

Notably, Mainstreet Marketplace closed FY24 with INR 30.2 Cr in operating revenue with a net loss of INR 6.1 Cr.

Problems With Resellers

Thus, soon after raising funds, the startup found itself in hot water again. Notably, Mainstreet’s business model was structured such that the startup did not hold any inventory. Instead, it sourced products only after receiving payment from customers.

Here’s how it worked: once a customer placed an order and made a payment on the platform, the startup would then search for resellers offering the exact product at a price point that could yield a profit. The reseller was paid only after the product was shipped to the customer.

This approach backfired when the Mainstreet began experiencing cash flow issues. Many sellers that the startup started delaying some orders in early 2024. By mid-2024, delayed payments became more frequent.

“For instance, if I was getting paid for 10 orders last month, now Mainstreet pays for only about seven. The remaining three go unpaid,” Mudit Arora, founder of Sneakwear, told Inc42.

Initially, resellers remained silent, having worked directly with Lamba for years. However, according to Arora, the delays soon became a recurring pattern. Inc42 reviewed a months-long email thread between Arora and Mainstreet that confirmed this.

For months, sellers on the platform have complained of non-payment, with some claims of outstanding dues ranging from INR 3 Lakh to INR 25 Lakh. One reseller said that he had been chasing payments for over six months, only to be met with silence.

Problems With Refunds

As resellers stopped receiving timely payments, many of them ceased sending sneakers to the startup. This not only disrupted operations but also damaged Mainstreet’s reputation within the industry. However, Mainstreet had already collected money from customers, which began causing significant delays in order fulfillment.

Several users on Reddit reported placing orders with the expectation of receiving their products within the advertised window of 7 to 11 working days. Instead, weeks — even months — passed with no sign of delivery.

One customer we spoke with said that they had been waiting for over a month without receiving their sneakers. Despite repeated attempts to contact the startup, users said the responses they received were generic apologies with no real updates.

In one case, a customer messaged Mainstreet founder Lamba directly on Instagram, only to be blocked instead of receiving a reply.

Another buyer recounted placing an order in early April. After several days with no shipping confirmation, they requested a cancellation. According to the customer, a former employee responded, stating that cancellations were not possible and warned that customers might have to wait months for their products, if they arrived at all. The ex-employee told a customer that Mainstreet routinely gave customers “false hope for months” before eventually canceling orders with vague excuses.

The warehouse employee we spoke to confirmed the same. He mentioned that there aren’t many orders to process. According to him, orders come in only occasionally, and each order he ships has an order ID that is higher by more than 100 compared to the previous one. This suggests that at least 100 online orders were placed before it, but have yet to be shipped.

In some cases, after completing payment, customers said they were met with complete silence. One user described waiting several days without receiving any emails or phone calls, despite attempts to reach customer support.

Many customers reported being told that refunds were not an option and that they would have to accept store credit or select an alternative item from the website instead.

Mainstreet’s Future Plan: A Studio Biz?

Lamba claims that he has already apologised to upset customers. He claims that all the orders before April have been delivered. However, Inc42 learnt that many customers are still waiting for orders way before April this year.

To tackle this, and to generate cash flow, Mainstreet has launched a new vertical internally called Main Street Studios, aimed at increasing revenue and growing profit. “Using the foundation we built with our YouTube channel, we now produce content for 15+ other brands and individuals. The capital from that is helping us clear existing issues,” Lamba said.

In the next few weeks, customer order backlogs will be cleared, the founder claimed.

“All sellers have been contacted. They’re understandably upset, but we’ve kept communication open. Most of the seller dues are small, with only a few having larger outstanding amounts. They’re still working with us, and they will continue to do so.”

Inc42 couldn’t verify the actual debt on Mainstreet at the moment in terms of its dues to resellers and customers.

Besides a studio, the startup is now also moving into collectibles space. Its website, which showed sneakers first, now also has collectibles like plushies and blind boxes. It also had tried its hands into used apparels, but failed to scale that too, as per an ex-employee.

“I’d really prefer not to share any more numbers. I’m coming off a very tough year. It’s been exhausting, and I’m still recovering emotionally and mentally,” Lamba.

The Sneaker Reselling Market In Limbo

India’s sneaker reselling scene, once riding a wave of hype, is hitting a rough patch. Over the past year, the cracks have become hard to ignore. A mix of global trends and local missteps have shaken the foundations of what was seen as a promising niche.

Platforms like CDC, Find Your Kicks, Culture Circle, Mainstreet Marketplace, and SoleSearch are all feeling the heat. The biggest blow has been the waning appeal of exclusivity.

Sneaker giants like Nike and Adidas have scaled back the scarcity playbook, flooding the market with drops that used to be rare. This has flattened resale values, gutting the very proposition these platforms relied on.

At the same time, the threat of fakes continues to haunt the market. Even as platforms like CDC insists on strong authentication processes, the larger market’s vulnerability to counterfeits continues to cast a shadow over the platform’s credibility.

To offset slowing sneaker sales, CDC has broadened into apparel and collectibles, however this diversification has diluted its core identity. Find Your Kicks, another big player, is facing issues rooted in its marketplace model. By allowing multiple vendors to list products, it exposes itself to a higher risk of counterfeits.

With lower resale prices and less consumer frenzy, the platform’s commission-based revenue model is under pressure. Real-time oversight of inventory and pricing has also become more complex and costly, forcing the startup to expand into apparel like its peers.

Culture Circle also shares similar struggles. The Shark Tank funded startup has seen its grip on exclusivity loosen, and is facing growing distrust from consumers as stories of fake sneakers persist.

All in all, the sneaker space is in limbo, and without a clear way forward, resellers are now at risk of losing it all. What was once a fast-moving, hype-fuelled space is now defined by caution, shifting loyalties, and survival instincts.

The game has changed, and unless platforms evolve with it, they may find themselves left behind in a market that no longer rewards just hype, but demands trust, value, and staying power. Mainstreet just learnt that the hard way.

[Edited by Nikhil Subramaniam]

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