Amid the ongoing funding crunch, layoffs continue to rise in the Indian startup ecosystem.
While B2B e-commerce startup Udaan is laying off 300-350 employees in a fresh round of layoffs, edtech company Practically has laid off over 70% of its employees, and peer Brainly has partially shut down Indian operations and fired nearly all its team, suggest various media reports.
“We have taken various steps to enhance efficiency, refine our cost structure and grow faster in our journey to achieve strong unit economics. However, the efficiency enhancement exercise has also resulted in certain redundancies in the system, with some roles no longer required,” an Udaan spokesperson said in an emailed statement to DealStreetAsia.
Udaan’s layoffs come less than five months after it let go of 180 employees.
Founded in 2016 by Flipkart alumni Gupta, Sujeet Kumar and Amod Malviya, Udaan is an e-commerce platform designed to connect small- and medium-sized businesses with manufacturers, wholesalers, and retailers to sell goods. It competes with the likes of IndiaMART, and Flipkart Wholesale, among others.
It is one of the most well-funded companies among Indian startups in the past few years. According to Fintrackr, it has raised around $1.3 billion and was valued at $3 billion as of January 2021.
These layoffs also come barely two weeks after the company raised $120 million in debt and convertible notes, with annual cumulative investments of $350 million. The company counts Microsoft, Nomura, Samena Capital, DST Global, GGV Capital, Altimeter Capital and Tencent among its investors.
Udaan’s spokesperson did not confirm the number of employees laid off. However, multiple media reports suggest the number to be around 350.
Immersive K-12 edtech platform Practically, which laid off permanent staffers across departments, also failed to pay salaries to many of its contractual and permanent employees over the last 3-4 months citing a liquidity crunch and a pending fundraise, Moneycontrol reported on Monday.
In an email to employees, the company said that it was facing a capital crunch at a time when many online edtech startups, especially in the K-12 space, were struggling to stay afloat as demand for online learning had dropped with offline classes and coaching centres opening up again, the report said.
Poland-based edtech Brainly meanwhile has partially shut down its Indian operations and fired nearly all of its team in the country, according to media reports.
According to reports, Brainly CEO Michał Borkowski got over a call and announced the layoffs and operations’ shutdown in the country.
Neither Brainly, nor Practically responded to DealStreetAsia’s requests for confirmation.
As the demand for online education slows and investor confidence wanes, edtech startups, which were once the darlings of investors, have been facing a funding crunch and resorting to drastic steps, including layoffs, to stay afloat. It has led to a host of well-funded companies such as BYJU’s, Vedantu, Uday, Lido Learning, Crejo.Fun, and SuperLearn to either shut down or lay off employees.