Exclusive: WayCool Fires 70 Employees In Second Restructuring Exercise WithIn A Year

Chennai-based WayCool Foods fired at least 70 employees over the last month in what was the second layoff exercise at the agritech startup within a year, sources told Inc42.

The latest layoff exercise impacted employees across departments, including sales, research, marketing, and tech, the sources said.

The startup, which houses subsidiaries such as WayCool Censa, WayCool BrandNext, also shut its warehouses over the last month, they added.

The sources cited the startup’s failure to raise any new funding round in the last two years as the reason behind the restructuring exercise.

Responding to Inc42’s queries on the issue, a WayCool spokesperson confirmed the layoffs but did not disclose the number of employees impacted by the restructuring exercise.

“Over the past one year, WayCool foods has focused its investment behind its own brands, to capture the benefit of its efficient supply chain to the fullest. Our brands have achieved a significant scale. This enables us to build a direct, warehouse free supply chain from source to market. Hence, we have rationalised the warehouse footprint, resulting in some redundancies,” the spokesperson said in a statement.

The spokesperson claimed that this shift has helped the startup reduce its EBITDA loss by over 80% and it is now poised to turn EBITDA profitable in Q1 FY25.

“Indeed, several of our business units are already EBITDA positive for several months . We are, as we speak, wrapping up another round of funding and will continue to raise capital as required by the business,” the statement added.

WayCool launched its FMCG entity BrandsNext Last year, which houses brands such as Madhuram, KITCHENji, DeziFresh, and Freshey’s. 

It is important to note that WayCool also laid off around 300 employees in a restructuring exercise in July last year in a bid to turn profitable. While some of the employees resigned, several others were asked to put down their papers. 

It was reported last year that the agritech startup was in talks to raise around $50 Mn-$70 Mn at a valuation of around $900 Mn. However, it failed to close this round due to the ongoing funding winter. This forced WayCool to cut down its expenses to extend the runway.

WayCool has not yet filed its financial statements for FY23 with the Ministry of Corporate Affairs (MCA). As per reports, it has reportedly cut down its expenses by 60% since October 2022 and was looking to close FY23 with a revenue of INR 1,700 Cr. 

In FY22, the startup’s net loss zoomed 142% year-on-year (YoY) to INR 360.5 Cr. Operating revenue surged 2.4X to INR 926.9 Cr from INR 382.3 Cr in FY21.

WayCool has raised a total funding of about $300 Mn till date and counts the likes of Lightrock, Lightbox, Lightsmith, 57 Stars, and FMO among its backers.