Tiger Global-backed Spinny on Thursday said it had to let go of 300 of its employees, as the used car startup merged two of its subsidiaries to put a lid on expenses.
“We are merging our budget and luxury offering platforms, Truebil and Spinny Max respectively, with our master brand Spinny. We have witnessed a sharp uptick in demand for reliable, budget-friendly cars as most people have resumed work from the office,” a company spokesperson said.
“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 statement added.
According to Tracxn, Spinny was valued at $1.6 billion in its latest funding round on Sep 29, 2022, for $518,ooo.
It raised a $283 million round in November 2021, catapulting itself into the unicorn club of Indian startups after peers Cars24, CarDekho and Droom.
Spinny’s layoffs come at a time when most used car startups in India have not been able to clock profits and are facing a more severe dry funding spell than other sectors in the Indian startup ecosystem.
In May, CarDekho.com shut down its retail vertical, while the SoftBank- and Alpha Wave Global-backed Cars24 laid off nearly 600 employees last year.
OLX Group, owned by global consumer internet group Prosus, has reportedly shut down the operations of its automotive unit OLX Autos in some countries including Argentina, Mexico, and Colombia and laid off 800 employees globally.
Earlier it was reported that Prosus was actively engaging with multiple players to explore the sale of Olx’s Autos unit in several markets.
Spinny’s losses widened over 300% year-on-year (YoY) to Rs 490 crore in the financial year 2021-22 from Rs 110 crore in FY21 due to a sharp rise in its advertising expenses, according to media reports.
The company did not respond to a request when asked for its profitability timeline by DealStreetAsia.