MFine has become the latest Indian startup to have gone through layoff
The healthtech startup has laid off over 600 employees, almost 75% of its workforce
To date, the startup has raised close to $97 Mn and was last valued at around $450 Mn
Bengaluru-based healthtech startup MFine has laid off around 75% of its total workforce (800 people) this week. According to Inc42 sources, around 600 employees have been impacted due to this.
The managers of various departments (over a Google Meet) had informed their respective teams that their team members’ services were no longer required, the source added.
In most of the cases, financial difficulties was cited as the reason for the layoff. Though, as per LinkedIn, the startup had 516 employees, multiple sources informed Inc42 that MFine had roughly 800 employees.
“My whole team is crying after yesterday’s event. Some have small kids, some have pregnant wives, and some are early earners. I am just trying to get them jobs,” one of the employees informed Inc42.
The person quoted above said that the startup has completely exhausted its funds. Most of the sales team has been dissolved along with the marketing team.
Another employee from a different department was stunned to hear the news about the layoffs. “A couple of days ago I was asked to take on a project. I was told on the basis of this project I would be given a promotion,” the employee said. Inc42 found several LinkedIn posts which confirmed that the startup was hiring until last month.
The employee further confirmed that the startup didn’t have any funds, and also hinted that a future deal had fallen off, causing the startup to fire the majority of its workforce.
MFine will be paying 20 days’ salary at the moment, and the remaining salary based on the notice period mentioned, would be credited in the next 60 days, a source added. However, several employees are sceptical about their salaries, as they have not received anything in written communication.
Inc42 had reached out to MFine seeking comment on the development, but the startup has refused to comment on it.
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The healthtech startup was launched in 2017 by former Myntra cofounder Ashutosh Lawania and Prasad Kompalli. Lawania and Kompalli were later joined by Ajit Narayanan and Arjun Choudhary as founding members.
MFine offers telemedicine services providing services across primary, secondary and chronic care. The healthtech startup claims to have over 6,000 doctors who have served 3 Mn users. According to a company press release issued in March this year, it was clocking 300,000 monthly transactions.
Over the years, the healthtech startup has raised close to $97 Mn in funding from investors such as Moore Strategic Ventures, BEENEXT, Prime Venture Partners amongst others. It is to be noted that the company raised most of its funding during the covid years which accelerated the demand for healthcare services amongst Indian users.
MFine had raised $68 Mn last year alone, of which, $48 Mn Series C funding round was announced in September. The company’s last reported valuation stands at around $450 Mn-$500 Mn.
From the healthtech sector point of view, since 2014 Indian healthtech startups have raised close to $5.3 Bn in funding, out of which, a major chunk of funding i.e. $3.2 Bn came between 2020 and May (16th) 2022, Inc42 data shows.
A quick glance at MFine’s financials reveals that the startup was in heavy losses. In FY21, the startup posted a loss after tax worth INR 102.7 Cr while its earnings from operations were a mere INR 12.9 Cr. MFine had spent INR 116 Cr for continuing operations in FY21. It has to be noted that the startup had already reduced its employee benefit expenses from INR 39.4 Cr in FY20 to INR 30.9 Cr in FY21.
MFine joins the long list of startups which have laid off employees in the recent weeks. According to the Inc42 estimate, over 5,600 employees have been laid off or terminated as a result of cost-cutting or financial constraints at Indian startups (excluding MFine).
If we look at a sector-wise landscape, edtech sector has been hit the most with about 2,800 employees being laid off or terminated or asked to resign by players in this space including — Unacademy, Lido Learning, Vedantu and WhiteHat Jr.
From a funding standpoint, after the gold rush witnessed in 2021, the year 2022 is turning out to be the year of litmus test for several startups. While 2021 was about funding, launching new products, blitzscaling, the year 2022 is more about survival and focus on profitability. The overall startup ecosystem has started to see the impact of the global downturn. VC funds, and global ecosystem stakeholders have started asking founders in their portfolio to cut down on the expenses and burn.
Update | 21 May, 11:50 PM
Story updated to include MFine’s headcount as per LinkedIn.