In the latest development around the slew of layoffs lately, gold-loan startup Rupeek Fintech Pvt. Ltd has laid off 10-15% (200 employees) of its workforce amid tough macro conditions and a funding crunch.
"With deep regret, we have taken a decision to part ways with 10-15% of the employees. The subdued macroeconomic environment has compelled us to recalibrate our strategy, relook at our costs and make our organisation structure leaner, to support our sustenance and growth," the company spokesperson said in a statement.
Sumit Maniyar, the company's founder and CEO, told staff about the decision in an email.
The email which was reviewed by VCCircle noted, “Globally, all the emerging markets including India are facing an extraordinary situation that has been caused owing to rising inflation, a hike in US treasury rates and the Russia-Ukraine war. The subdued macroeconomic environment has compelled us to re-calibrate our strategy, relook at our costs and make our organization structure leaner, so as to support our sustenance and growth.”
The email continued, “We conducted a thorough exercise, and have decided to keep the right fitment of the workforce required, aligned with our revised strategic plans. This was definitely one of the most difficult processes that we as an organization had to go through.”
According to two sources VCCircle spoke to, employees in sales and marketing functions were most affected. The company did not comment on the matter.
The company has witnessed 2-fold growth in the last two quarters and the business model is structurally well placed to continue growing at a healthy speed. Unfortunately, while this restructuring was imperative, we are yet to ascertain when the industry will hit normalcy and recover fully,” Maniyar said in the email.
In 2020, Rupeek decided to not renew contracts of 600 contractual employees due to the situation around the COVID-19 crisis.
In January, Rupeek raised $34 million (Rs 252 crore) in a funding round led by new investor Lightbox valuing the company at $634 million. Rupeek also said it has recorded an annual disbursement run rate of $1 billion in December last year.
Fed rate hikes, the Russia-Ukraine war have prompted venture capital firms including Y-Combinator, Beenext, Sequoia and others to raise alarms for their portfolio companies of a possibly long slowdown and asked them to brace themselves for a “funding winter.”
Multiple startups across sectors have recently asked employees to go, potentially in a bid to conserve capital in a difficult funding environment. Last week, business-to-business (B2B) marketplace Yojak shut its India operations and laid off up to 140 employees from April to May.
Learning platform Udayy shut down its operations and laid off its entire staff comprising up to 100 employees. The company decided to return up to $8.5 million to its investors, out of the total $13 million raised during its operations.
Digital health platform Mfine laid off over 50% of its staff due to a lack of funds to pay salaries. Earlier this month, the used cars platform Cars24 asked 600 employees to leave and edtech startup Vedantu laid off 424 employees. In March and April, Unacademy, operated by Sorting Hat Technologies Pvt. Ltd laid off nearly 1,500 employees.
Earlier this year, another edtech startup Lido Learning asked 1,200 of its employees to resign, saying that it was looking to wind down its operations amid a funding crunch.
Social commerce startup Meesho laid off 150 employees last month. In February, OkCredit, which is backed by marquee investors including Tiger Global and Lightspeed, laid off around 40 employees.
Notably, most of the startups that have laid off employees had raised significant funding last year. Cars24 raised $300 million in equity and an additional $100 million in December 2021, at a valuation of around $3.3 billion.