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Exclusive: VC-backed Industrybuying likely to downsize workforce

10 November, 2017

A major downsizing drive is underway at Kalaari Capital and SAIF Partners-backed business-to-business online commerce portal Industrybuying, three persons aware of the development told VCCircle.

While the exact quantum of firing could not be immediately ascertained, around 30-50% of its 500-strong workforce could face threat to their jobs, said two of the persons cited above. Some senior executives in tech, business and sales are also likely to exit the firm amid this churn, the persons said. Anuj Tiwari, head of business, and Udit Srivastava, senior vice president – engineering, have quit the company, according to the persons. “Many among the senior leadership team are on the exit mode,” said one of them.

Various functional heads in the company have started communicating with their respective teams about an impending job cut, said the third person. “There will be significant job cuts while details are still being worked out,” he said.

An email query sent to Industrybuying co-founder Swati Gupta did not elicit any response. She also did not return calls.

A fund crunch clubbed with competition, on-ground challenges in business and rationalising of the workforce after a massive hiring early this year are cited as reasons for the latest move while there is no official word on it yet.

Founded in 2013 by Swati and Rahul Gupta and operated by Emtex Engineering Pvt. Ltd, Industrybuying is one of the early movers in the online B2B commerce space. The company raised a total of $18.8 million in equity funding from SAIF Partners, Kalaari Capital, Beenext and family members of Chennai-based Murugappa Group and TVS Group in three rounds till December 2016 and $2.12 million debt funding from Trifecta Capital, according to VCCEdge, the data research platform of VCCircle.

Earlier this year, Tolexo, one of the earliest ventures in this domain, shut operations citing slow momentum in business in the aftermath of demonetisation.

Meanwhile, some of the relatively younger peers in the digitally enabled B2B commerce such as Power2SME and Moglix grew faster and attracted investors. Power2SME, for instance, raised $26 million from existing investors in September, taking its total fundraising to $36 million. Kalaari Capital, Inventus Capital, Accel Partners, Nandan Nilekani and IFC are the backers of Power2SME. IFC has also backed its competitor Moglix, which raised around $18 million from investors including Accel, Jungle Ventures and Ratan Tata. Accel has also backed Udaan.com founded by former Flipkart executives. Its other backer is Lightspeed Ventures.

While Industrybuying, which is funded relatively less, face competitive pressure, it is also dealing with certain operational issues. It has adopted a zero inventory model and holds no control over the delivery of goods, resulting in delays and faux pas, going by some of the customer reaction on Twitter.

The company mostly facilitates online booking and delivery of industrial materials, tools and metals. Engineering, procurement and construction (EPC) players as well as manufacturing firms form a major chunk of its customer base. The company failed to meet its internal GMV target as its target group of small businesses faced a liquidity crunch following demonetisation, said one of the persons cited above.

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Exclusive: VC-backed Industrybuying likely to downsize workforce

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