In the latest development amid a slew of sackings at startups, direct-to-consumer (D2C) brand Fraazo has laid off some of its staff amid a funding crunch in the ecosystem.
The startup, which had raised $50 million in fresh funding led by WestBridge Capital in October last year, has also shut its operations in the Delhi-NCR region, another person said.
News portal Inc42, which first reported the development, said that Fraazo has laid off over 150 of its employees and has shut more than 50 dark stores across the country.
Fraazo declined to comment on VCCircle’s query.
Founded in 2019 by Atul Kumar, Vikas Dosala, Sumit Rai, and Aashish Krishnatre, Fraazo operated only in Mumbai and Hyderabad until October last year when it raised $50 million led by Westbridge. It later expanded to Bengaluru and Delhi.
The Westbridge-led funding round had come close on the heels of its Series A financing round led by consumer-focused venture fund Sixth Sense Ventures in July. Nabard-backed Nabventures and existing investors including Equanimity Ventures also participated in that funding round. Notably, Nabventures made a quick exit just three months after its investment by selling its stake to WestBridge.
In fiscal 2020-21, Fraazo's net sales grew to around Rs 21 crore from 15.5 crore in the previous financial year, according to VCCEdge, the data and intelligence platform of VCCircle. Its earnings before interest, taxes, depreciation, and amortization (EBITDA) loss expanded to Rs 15.8 crore from Rs 10 crore.
Multiple venture capital-backed startups across sectors have laid off over 10,000 employees since the beginning of this year, according to a VCCircle analysis. The hiring frenzy seen after two years of the pandemic due to increased digitalization has slowed as many cash-guzzling startups saw their finances deplete with investors sharpening their focus on profitability.
Layoffs have been most prominent in the edtech space. Late last month, pink slips were seen at edtech decacorn Byju's acquired companies Toppr and Whitehat Jr. Other edtech companies such as Unacademy, Vedantu and Lido Learning have also laid off staff.
Outside edtech, startups such as Meesho, Furlenco, Cars24, MFine, MPL, OkCredit and Citimall also let go of their employees. Notably, most of these startups had also raised significant funding last year.