Year End Review 2020
When the world shut down, they survived; when cash flow dried, they raised billions; when deals were few, they got acquired. From exciting launches & mammoth funding to biggest shutdowns, a look back at 2020 through startups’ lens.
The year 2020 has been massively disruptive for businesses across sectors. While India Inc. continues to battle the impact of the Covid-19 pandemic, it has been a struggle for existence for startups with limited resources. Indian startups have taken every possible step to safeguard cash reserves and market base amid pandemic freeze and lockdown chaos. But all is not well this year, which has been deeply impacted by the force majeure. For instance, Indian startups have secured nearly 68% and 33% less funding in May 2020 compared to the year-ago period in 2019 and 2018, respectively. This has affected valuations and cash flow of startups of all sizes, thus forcing them to seek more ruthless measures like mass layoffs, pay cuts and freezing promotions and salary hikes.
According to Inc42Plus estimates, around 22% of startup employees in India had been laid off, with unicorns leading the pack. However, this brutal stretch of the pandemic has also witnessed companies elevating their senior talent to the cofounder rank in a bid to retain senior talent. Several startups have used this opportunity to opt for lateral hiring and appoint industry veterans from and outside the startup ecosystem. Some entrepreneurs have also joined companies as cofounders, much to the amazement of industry leaders.
As we gear up for 2021, hoping for a safer, calmer and more prosperous year ahead, here is a look at the HR trends across the startup landscape which continued to make it to the headlines this year.
When Layoffs Hit The Startup Industry
The lockdown brought with it a massive burden of fixed costs for startups with no possibility of doing business or earning revenue anytime soon. The layoffs were primarily led by the companies which thrived in the shared mobility space and home-delivery services which account for the largest chunk of the gig economy. Between Ola, Uber, Swiggy and Zomato, around 4,000 people lost their jobs by May 2020. The shockwaves continued as more people were laid off by Cure.fit (nearly 1,000 employees), Paisabazaar (1,500), BookMyShow (1,450) Udaan (around 3,000 contractual staff). Beyond layoffs, many companies had also compelled their workforce to take salary cuts across the employee pyramid.
Hospitality unicorn Oyo, which was already going through a process of layoffs globally, saw its revenue crunch leading to job cuts across 80 countries, including a third of its US-based staff, even before the pandemic hit the world. OYO asked thousands of employees to go on unpaid leave, or furloughs, for up to three months. It is reportedly laying off people even in December.
But the worst was yet to come. As businesses shut down all over the country, they lost their huge and underprivileged blue-collar employee base to the ill-advised but unavoidable migrant exodus. With expenditures racing ahead of revenue and a complete lockdown plugging all access to liquidity also spelt the worst for micro, small and medium businesses and their low-salaried workers.
When Startups Took Pro-Employee Measures
Several companies such as Ixigo, Droom, ClearTax and IndiaLends refrained from layoffs during the most challenging times. Founders from Paytm, Ola, Swiggy, MakeMyTrip and other startups also took pay cuts to ensure cost control and boost employee morale.
The hiring scenario took a turn for the better towards the end of the year as edtech and fintech startups, loaded with funds, started hiring in full swing. HR firm Teamlease noted that by October, 60% of the job postings across its platforms for blue- and white-collar openings came from startups. Many of these companies also came up with lucrative ESOP (employee stock ownership plan) offers and buybacks of the same to reward their people for sticking by in tough times.
The Year of Cofounders
A trend that started in 2019 continued through the worst months of the pandemic as startups elevated key members to cofounder roles. Of course, it did not necessarily earn all companies the goodwill and the retention that they hoped for. But then, very little in 2020 has gone as planned.
Zomato named its food delivery business CEO, Mohit Gupta, as the cofounder after less than two years and a half in the company. Only last year, the foodtech behemoth elevated its COO, Gaurav Gupta, as a cofounder. Digital payments company Mobikwik also promoted its senior vice-president, Chandan Joshi, as the company’s cofounder and CEO of the payments business. Logistics startup Shadowfax also appointed senior leaders Praharsh Chandra and Gaurav Jaithliya as its cofounders, effective from December 2020.
Among the key promotions in 2020, ride-sharing giant Uber announced the appointment of Prabhjeet Singh as president, Uber India and South Asia, and elevated other senior leaders. Singh replaced Pradeep Parameswaran, who was promoted to the role of regional general manager for the Asia Pacific at Uber. Meanwhile, Oyo promoted Anuj Tejpal as the chief commercial officer, Abhishek Bansal as the chief revenue officer and Yatish Jain as head of marketing and growth. Meanwhile, Zomato COO Gaurav Gupta stepped down from his role to continue focussing on the company’s nutrition business.
High Profile Exits In 2020
Some of the significant management changes this year have been reported across food aggregators and mobility businesses. Cab aggregator Ola witnessed a slew of top management exits throughout the year, hinting at problems within the company, with co-founder Ankit Jain’s departure being the tipping point. This year’s exodus followed the nine high-profile departures the company witnessed last year.
Swiggy cofounder Rahul Jaimini’s exit from the company also ruffled the restaurant aggregator space. Jaimini, cofounder and former CTO of the Bengaluru-based foodtech startup, announced his resignation and said that he was planning to join an edtech startup called Pesto Tech where he had invested earlier. Similar events unfolded in Oyo as senior executives Gaurav Ajmera, global head of revenue management, and Burhanuddin Pithawala, global head of marketing and growth, quit in September. Chandan Agarwal, who was managing Oyo’s cloud kitchen business, also left this year.
Another exit that made the headlines was that of Pravin Jadhav, who was named founder of Paytm Money, the wealth management arm of Paytm, and was the first team member on the board of directors. He resigned from the company in April over remuneration and ESOP-related issues. This came at a time when the company was looking to expand the market for Paytm Money with mutual fund services. These services are likely to be extended to the 16 Mn merchants who have registered on the platform.
Key Appointments In 2020
In spite of high-profile exits across companies, industry veterans and senior leaders still managed to bag major roles. In a key development, SaaS company Crowdera appointed former Ola advisor Srinivas Chunduru as chief advisor, strategic alliances.
The easing of the first lockdown in May also saw the likes of Swiggy and Zomato scampering to find new products to cater to its clientele and essential grocery delivery became an instant hit, earning the startups some much-needed revenue. While Zomato continued its streak of management appointments and reshuffles during this period, payment operator BharatPe managed to head-hunt Zomato’s chief sales officer, Nishant Jain.
Bengaluru-based vernacular social media platform ShareChat appointed Wavemaker’s former global president Ajit Varghese as its chief commercial officer. ShareChat also appointed Gaurav Mishra as SVP-Product. Mishra was a former product leader at Uber and spearheaded Uber AI, data and marketplace platforms at the company. Uber, too, hired Expedia’s former chief people officer, Nikki Krishnamurthy, as its new head of human resources.
Ups And Downs For Global Giants
While the global debate on free speech versus hate speech continued to rage, Facebook India found itself in the soup, and it ended with the exit of its head of public policy, Ankhi Das.
Facebook also announced that it had appointed the first 20 members to its Oversight Board. This board will take final and binding decisions on whether specific content should be allowed or removed from Facebook and Instagram. Out of the total 20 members, Sudhir Krishnaswamy is the only Indian on the board.
Notable Indian appointments in global roles included the appointment of former IBM executive Karan Bajwa as the head of Google Cloud India and IBM veteran Arvind Krishna’s promotion to the position of the global CEO.