Exclusive: Prime Venture Partners Backed Dozee Lays Off Around 40 Employees

SUMMARY

Dozee conducted the layoff exercise, which impacted employees from on-field and customer success teams, sales team, and marketing team, in a bid to cut its losses

Dozee told Inc42 there was no reduction in its manpower. However, it said that there was a reallocation of resources which affected a “very miniscule number” of its headcount

The healthtech startup spent INR 41.1 to earn every INR 1 in operating revenue in FY23

Healthtech startup Dozee laid off around 40-50 employees in a restructuring exercise last month in a bid to cut its losses, sources told Inc42.

The exercise impacted employees from on-field and customer success teams, sales team, and marketing team, the sources added.

The startup’s total employee count stood at about 250-270 before the layoff exercise, multiple sources said.

“We were told that the layoffs had nothing to do with our performance. The restructuring was being done to cut losses,” one of the sources said.

The impacted employees will receive severance packages based on their respective notice periods.

Responding to Inc42’s queries on the development, a Dozee spokesperson said there was no reduction in its manpower. However, the startup said that there was a reallocation of resources which affected a “very miniscule number” of its headcount.

“The figures you’ve referenced are entirely unfounded. As part of our growth strategy, we are reallocating resources with a greater focus on HealthAI, clinical research, and international business development. Reallocation of resources with evolving business needs is a natural part of the life cycle in the growth journey of any organisation. This has affected a very minuscule number of our total headcount,” the spokesperson said in a statement.

A follow-up questionnaire seeking information about the exact number of affected employees didn’t elicit any response till the time of publishing this story.

Founded in 2015 by Mudit Dandwate and Gaurav Parchani, Dozee’s contactless patient monitoring system enables healthcare workers to remotely monitor the vital parameters of patients such as heart rate, respiration rate, blood pressure, and temperature. It also offers an early warning system that alerts doctors about clinical deterioration of a patient’s health.

The sources cited above attributed the layoffs to the startup’s failure to scale its revenue. “Despite having a presence across the country, the revenue growth is tepid and the loss has grown multifold,” said one of the sources.

This is also reflected in Dozee’s financial statements. While the startup is yet to file its statements for FY24, it reported a 33% decline in revenue to INR 2.1 Cr in FY23 from INR 3.1 Cr in FY22. Its loss zoomed 175% to INR 84.4 Cr from INR 30.6 Cr in FY22 due to growing employee expenditure and advertising expenses.

While Dozee’s employee costs increased 5X to INR 54 Cr in FY23 from INR 17 Cr in the previous fiscal year, marketing expenditure doubled to INR 4 Cr from INR 1.8 Cr in FY22. Overall, total expenditure rose 160% to INR 87.8 Cr in FY23 from INR 33.8 Cr in FY22.

This means that the startup spent INR 41.1 to earn every INR 1 in operating revenue.

As Dozee has struggled to grow its business in India, the startup is now eyeing the US market, the sources said.

“… We have also expanded our footprints in the USA, UAE and Africa. With our path-breaking innovation in AI-powered ballistocardiography, we are well on our way to become a global leader in HealthAI,” the Dozee spokesperson added in the statement sent to Inc42.

Dozee last raised $6 Mn funding in Series A2 round from 3one4 Capital, Prime Venture Partners, YourNest VC, State Bank of India, among others, in April last year.

The startup has raised close to $12 Mn in funding across multiple rounds till date.