Drip Capital didn’t provide any clear reason for the layoffs that affected over 75 employees, sources said
The layoffs came just a year after the trade financing startup raised $175 Mn in a funding round in October 2021
The layoffs left employees bewildered as Drip Capital told them in September 2022 that the business was doing well
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California- and Mumbai-based Indian trade financing startup Drip Capital laid off about 20% of its 400-member workforce in November last year in a restructuring exercise, sources told Inc42.
While the layoffs impacted employees across teams, the tech, engineering, and sales departments took the biggest hit.
The sources said that the startup didn’t provide any clear reason for the layoffs, which affected over 75 employees.
In an email response to Inc42’s query about the layoffs and business restructuring, Drip Capital said, “Unfortunately, we won’t be able to comment on this matter right now.”
Narrating the sequence of events, the sources said that CEO Pushkar Mukewar announced the business restructuring plan during a town hall meeting with all employees in mid-November last year. Within hours, the impacted employees were separately asked to resign over emails.
A source said that the mass layoffs left employees bewildered as Drip Capital had told them in September 2022 that the business was doing well.
While most of the employees impacted by the layoffs were from India teams, a few in the US and Mexico teams were also fired.
Drip Capital gave a two-month salary as severance pay to the impacted employees. The full and final payments were cleared within 15 days.
Founded in 2016 by Mukewar and Neil Kothari, Drip Capital offers digitised trade financing solutions to small and medium business (SMB) clients in India, the US, and Mexico.
The layoffs came just a year after Drip Capital raised $175 Mn in a funding round in October 2021. It included a $40 Mn Series C investment and $135 Mn in warehouse debt facilities. The fintech startup counts the likes of TI Platform, Accel, Sequoia, Wing VC, Irongrey, among others as its investors.
Meanwhile, Drip Capital also provided appraisals to many employees around the time the layoffs took place. Besides, the startup is hiring for multiple positions now, months after firing employees.
The development comes at a time when many Indian startups, including unicorns like OYO, BYJU’S, and Dunzo, have laid off employees over the last year or so in a bid to cut costs and increase their runway amid the unrelenting funding winter.
Since 2022, over 25,000 employees have been laid off by at least 88 startups, as per Inc42’s layoff tracker.
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