Exclusive: Insight Partners-Backed Appsmith Lays Off 25% Of Its Workforce

SUMMARY

Appsmith fired 35 employees and attributed the layoffs to the challenging market conditions and the slowdown in business, sources told Inc42

As part of the severance package, Appsmith is offering a two months severance pay

The startup in July last year had raised $41 Mn in its Series B funding round led by Insight Partners

US and India-based app development startup Appsmith laid off 35 employees, or around 25% of its workforce, earlier this week, sources told Inc42.

Like a number of other Indian startups which have fired employees recently, Appsmith attributed the layoffs to the challenging market conditions and the slowdown in business, the sources added.

The layoff exercise impacted employees across teams. The startup has offered a two-month salary as severance package to the impacted employees. It will also offer outplacement support and has allowed the impacted employees to keep their office laptops with them, the sources said.

Responding to Inc42’s queries on the development, an Appsmith spokesperson shared an internal mail sent by cofounder and CEO Abhishek Nayak to employees. “In 2023, our growth rates, and our revenue growth dipped. This challenge has affected us and every company. There is also a shift towards sustainable growth vs. growth at all costs. This requires us to operate differently,” Nayak said in the mail.

Consequently, Nayak said, the startup is adapting to the evolving fundraising market with focus on operational efficiency for long-term success.

He said the current and forecasted revenue requires the startup to have a “leaner, more efficient, and focused team” to prioritise revenue effectively.

“We’ve experienced the strongest revenue growth ever in recent quarters, but also recognize the need for more R&D investment, and a longer runway to reach our long-term revenue goals… The impact of reducing our team size is a terrible thing for many of us and one that I’m deeply sorry about,” the mail said.

Founded in 2019 by Nayak, Arpit Mohan, and Nikhil Nandagopal, Appsmith is an open-source low-code software startup. It helps organisations to build and customise apps as per their requirements.

The startup provides tools using which developers can build applications within hours using its pre-built components and APIs. It competes with the likes of Builder.ai, Visual LANSA, and Mendix.

In July last year, Appsmith raised $41 Mn in its Series B funding round led by Insight Partners. The round also saw participation from Accel, Canaan Partners, OSS Capital and a few angel investors.

Prior to that, the startup raised $8 Mn in its Series A round led by Canaan Partners in October 2021.

The development comes at a time when the ongoing funding winter has battered the Indian startup ecosystem. Lack of funding and investors’ focus on profitability has forced startups to transition from aggressive growth models to sustainable growth.

As a result, Indian startups are on a cost-cutting drive and have resorted to mass layoffs to achieve profitability and increase their runways.

According to Inc42’s layoff tracker, Indian startups have laid off over 28,000 employees since last year.