SUMMARY
A spokesperson of the startup said that efficiency enhancement drive and the evolution in business model has created some redundancies in the system
The B2B ecommerce unicorn said that it would provide the requisite support to the employees impacted by the layoffs
In June this year, Udaan laid off 180 employees as part of its cost-cut initiatives
B2B ecommerce unicorn Udaan has laid off 350 full-time employees in its quest to turn profitable and “achieve efficiency”, according to sources. This is the second such exercise at the startup in the last five months.
In a statement, a spokesperson of Udaan confirmed the layoffs. “We believe in efficiency as a driver of profitable growth and will continue to refine our cost structures and models. In this direction, we have taken numerous steps, with enhanced digital capabilities, to achieve efficiency and scale, become more agile and remain competitive in the marketplace,” the spokesperson said.
The spokesperson added that the initiatives have helped the startup achieve positive unit economics, reduce inefficiency, and achieve cost benefits. “As we move forward in our journey towards making Udaan a profitable company, the efficiency enhancement drive and the evolution in business model has created some redundancies in the system, with some roles no longer required.”
The startup said that it would provide the requisite support to its impacted employees.
However, according to a report by The Morning Context, the total number of employees who have been laid off can be as high as around 1,000.
Earlier in June, Udaan laid off 180 employees as part of its cost-cut initiatives. Sources had then told Inc42 that the number of affected employees could go as high as 600.
The latest layoffs at the Bengaluru-headquartered startup come days after it was reported that it raised $120 Mn in convertible notes and debt from its existing investors. It is pertinent to note that in January also Udaan raised fresh funds of $250 Mn, of which $200 Mn was raised through convertible notes and $50 Mn through debt.
In the last four quarters alone, Udaan has raised over $350 Mn in debt.
Earlier this year, Udaan CEO Vaibhav Gupta, in an email to the employees, said that the startup was on track to have positive unit economics by the end of June 2022 quarter. The email noted that Udaan had improved its unit economics by more than 1,000 basis points (bps) over the last year.
Founded in 2016 by Gupta along with Sujeet Kumar, and Amod Malviya, Udaan connects small- and medium-sized businesses, wholesalers, manufacturers, traders, and retailers to sell goods and other services. It competes with the likes of JioMart and Walmart-owned Flipkart’s B2B arm.
As per a recent internal note viewed by Inc42, Udaan CFO Aditya Pande wrote that Udaan was readying for an IPO in the next 12-18 months. However, it could also suggest that Udaan is delaying its IPO plans as the startup had given a timeline of 12-18 months for IPO in January this year as well.
In FY21, Udaan generated revenue of INR 5,919 Cr with total expenses of INR 8,742 Cr. It managed to narrow its loss to INR 2,482.3 Cr in the year from INR 2,518.7 Cr in FY20.
Despite the growing costs, Udaan was reportedly mulling buying Metro AG’s India wholesale unit Metro Cash & Carry.
The ongoing funding crunch in the Indian startup ecosystem has led to several startups resorting to laying off employees to cut costs and increase their runway. As per Inc42’s layoff tracker, Indian startups have laid off over 15,000 employees in 2022 so far, with edtech being the worst-hit sector.
