SUMMARY
The B2B ecommerce unicorn has confirmed the development
According to another source, the number of impacted employees could go up to 600
The layoffs comes within 6 months of $250 Mn debt funding round raised by Udaan
B2B ecommece giant udaan
has joined the long list of Indian startups resorting to layoffs to cut costs amid the market conditions. The Bengaluru-based unicorn has laid off around 180 employees, according to an Inc42 source.
The company confirmed the development to Inc42 and said that will be providing all required support to the impacted employees. It claimed that the affected employees will be provided — medical insurance for self and family (based on the existing coverage plan), a compensation package as per company policy and providing placements assistance.
According to another source, the number of impacted employees could go as high as 600.
The development has come just six months after it had raised $250 Mn in a convertible note round from investors such as Microsoft, M&G Prudential, Kaiser Permanente, Nomura, TOR, Arena Investors, Samena Capital and Ishana Capital.
Founded in 2016 by former Flipkart employees Sujeet Kumar, Vaibhav Gupta and Amod Malviya, Udaan claims to connect small and medium-size businesses, manufacturers, wholesalers, traders and retailers to sell goods and other services.
The startup claims to have a network of 25,000 sellers across the country offering over 5 lakh product categories. Udaan is operational in 900 cities.
“We believe in efficiency as a driver of profitable growth and have already made significant progress towards building a sustainable business. As the market evolves, we continue to tweak our already proven business model to make it stronger, more efficient, customer-centric and agile..,” the company said in a statement.
“In this direction, we have taken various steps to enhance efficiency, refine our cost structure and grow faster in our journey to achieve strong unit economics. However, the efficiency enhancement exercise has also resulted in certain redundancies in the system, with some roles no longer required. On the other hand, as part of the long-term plans of the organisation, we continue to hire talent for the new roles that have been created to grow the business faster,” the company added.
Interestingly, the development comes a week after Udaan’s CEO Vaibhav Gupta had informed Udaan’s employees in an internal mail that the startup is on track to have positive unit economics by end of June quarter. Gupta, in the mail, had written that the startup unit economics has improved by more than 1,000 basis points over the last years and has even cut its cash burn by 40% in 2022.
Coming to financials, in FY21, Udaan had generated INR 5,919 Cr in revenues at an expense of INR 8,742 Cr. The startup managed to narrow its loss to INR 2,482.3 Cr in FY21 from INR 2,518.7 Cr in FY20. With this Udaan has become the 29th Indian startup to have gone through layoffs. According to the Inc42 layoff tracker, Indian startups have laid off 10,238 employees (including Udaan) in 2022.
While the edtech sector has seen the highest number of layoffs, with two startup shutting down its operations, ecommerce startups are not much behind.
Ecommerce startups have laid off around 2,530 employees. The development of Udaan’s layoffs came almost a week after another ecommerce startup – CityMall laid off around 191 employees. Prior to CityMall, other ecommerce startups such as Meesho, Trell, and Blinkit have also laid off employees this year. In the B2B space, Inc42 had exclusively reported that Info Edge-backed Yojak had laid off around 140 employees as it had to wind down its domestic operations.
