Exclusive: Premji Invest-Backed Increff Lays Off 20% Workforce To Cut Costs

Premji Invest-backed SaaS startup Increff laid off around 60 employees, or 20% of its workforce, last week in a cost-cutting exercise, sources told Inc42.

The laid off employees were from tech, sales, customer success, and HR teams, among others. The impacted employees were informed about the layoffs in one-on-one meetings with the higher management and asked to resign on the spot, the sources said.

Responding to Inc42’s queries on the development, Increff CEO and cofounder Rajul Jain confirmed the layoffs.

As per the sources, adverse macroeconomic conditions and failure to meet the targets for onboarding new clients was behind the decision to layoff employees. 

“Increff was not meeting the expectations in terms of onboarding new clients that it had projected earlier. Besides this, the startup even saw some existing clients dropping out,” said a person aware of the development. 

Another person aware of the developments at the startup said Increff’s expansion plans for the US and Europe didn’t pan out the way it expected despite spending big on marketing in these regions. 

Increff’s sales team in the US was among the biggest casualties in the layoff round.

However, Rajul said that the startup is not halting its expansion plans in the US and Europe. “… our sales will be more partner-led rather than direct,” he said. 

It must be noted that Increff, when it raised its Series B round led by TVS Capital last year, said it would utilise the capital to strengthen sales and marketing in international geographies, specifically in the US and Europe. 

“The layoffs were a part of the cost-cutting exercise that Increff is doing to achieve profitability at the earliest. Without attaining profitability, the startup won’t get the valuation that it is seeking,” one of the sources said.

However, Rajul said the startup has not yet “gone to the market” for the next round of funding. On profitability, he said, “We touched profitability a couple of years back. We are now focusing on becoming profitable again.”

Increff has also cut down its marketing expenses in its quest to turn profitable, as per the sources. 

Founded in 2016 by Rajul, Anshuman Agarwal and Romil Jain, Increff helps fashion brands and retailers optimise inventory and improve sales velocity through its inventory management and supply chain solutions offered via its SaaS platform.

Last year, it raised $12 Mn in a Series B round, which saw participation from Premji Invest, Binny Bansal’s 021 Capital, among others. Earlier, in 2017, it raised around $2 Mn from Sequoia Capital (now Peak XV Partners). 

Currently, Increff boasts of having clients such as Puma, Adidas, Bata, Levi’s, Pepe, Celio, Gap, Benetton, among others.

Its revenue from operations rose over 27% year-on-year to INR 44.4 Cr in FY22, while loss dropped over 37.5% to INR 2.8 Cr. 

As per Rajul, the startup clocked a revenue of INR 85 Cr in FY23.

With the job cuts, Increff has become the latest Indian startup to join the long list of startups which have laid off employees over the last year or so amidst the funding winter. According to Inc42’s layoff tracker, Indian startups have laid off over 28,000 employees since last year.

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Update | 1st August, 20:55

Some parts of the story has been edited.