Tiger Global Backed Spinny Lays Off Around 300 Employees

Gurugram-based used car marketplace Spinny has joined the ongoing list of Indian startups that have laid off employees. The auto marketplace has downsized around 4.5% of its total workforce, approximately 300 employees, out of a total of 6,500.

The layoffs were a result of the merger of Truebil and Spinny Max with its main Spinny platform.  

Spinny acquired Trubil for an undisclosed amount in August of 2020 to offer budget pre-owned cars. On the other hand, Spinny Max offers premium used cars.

The Truebil website has already started redirecting to the main Spinny website. 

“This business reorganisation will strengthen our go-to-market business model, reduce costs and improve our margin profile, putting us on an expedited path to profitability. However, it will impact approximately 4.5% of our total workforce as we consolidate our operations under a single brand,” the company said in a statement to Inc42.

The layoffs have occurred at a time when the used car market is poised to outpace the new car market in the country. According to OLX Autos-CRISIL Study 2021 report, the Indian used car market is anticipated to reach a size of 70 lakhs cars being sold annually by 2025-26, up from 38 lakhs sold in 2021-22. 

However, most of these used car marketplaces are burdened with heavy losses. Late last month, Inc42 analysed the financial health of the three leading used car marketplaces – Spinny, Cars24, and Droom.

Out of the three, Spinny reported the highest surge in loss in the financial year 2021-22 (FY22). The Tiger Global-backed unicorn saw its loss jump by 4X to INR 490 Cr from INR 110 Cr in F21. The startup’s surge in losses can be attributed to the significant increase in marketing expenses, which rose by 6.8 times to INR 220 Cr in FY22.

While Spinny saw a significant jump in its operating revenue in FY22 compared to Cars24 and Droom, the startup’s operating revenue was still far behind its competitors. It reported an operating revenue of INR 109.4 Cr in FY22, compared to Droom’s INR 384.6 Cr, and INR 5,136.5 Cr reported by Cars24, during the same period. 

Last year in May, Inc42 exclusively reported that Cars24 had laid off around 600 employees.

Founded in 2015 by Niraj Singh, Mohit Gupta and Ramanshu Mahaur, Spinny offers a full-stack pre-owned car platform that uses the online-to-offline (O2O) model to help customers discover cars online. At present, the startup has over 50 car hubs across Delhi NCR, Kolkata, Ahmedabad, Pune, Bengaluru, among other cities, 

In late 2021, the startup entered the unicorn club after raising $283 Mn Series E funding round led by ADQ, Tiger Global, and Avenir Growth at $1.8 Bn valuation. The round also saw participation from Feroz Dewan’s Arena Holdings and Think Investments.

To date, the startup has raised around half a billion dollars across multiple rounds and also counts Elevation Capital, General Catalysts, and Blume Ventures as its backers. 

Since the beginning of 2022, as the funding winter gripped the world in the backdrop of the Russia and Ukraine war, startups in India resorted to layoff as a cost-cutting measure to sail through the recession-like period. As per Inc42 layoff tracker, Indian startups have collectively laid off over 28,000 employees since the start of 2022.