1. If they're VC funded they can afford to lose money on the product for along time. Not great. However, they're charging the same as you, so you're not competing with free at least.

2. Do you need to have every single user in the market? If not, does it matter that there are competitors? Can't you both co-exist?

3. Features often matter a lot less than marketing. If you haven't done any marketing and are relying on features, then yes, you have a problem.