The latest round of startup layoffs in India has affected nearly 1,700 employees. Educational startup Unacademy axed 600 jobs, firing 325 part-time employees and educators. In a similar move, e-commerce unicorn Meesho laid off 150 employees just seven months after raising its last round of funding. These are just some of the latest headlines surrounding start-up layoffs in India.
Unacademy laid off 1000 employees
The education company Unacademy has laid off over 1,000 employees, including on-roll and contractual employees. Most of the people laid off were educators and were on probation, but some employees said they were forced to work 14-hour days or more. Some were told they were no longer wanted and had no idea they were being laid off. Others said the company’s management didn’t give them enough feedback on their performance and that they were fired within two months of starting work.
The layoffs have impacted the whole company: 600 employees are from sales and business functions, and the rest are contract educators. As the company battles numerous headwinds, it is bracing itself for a slowdown in its business venture and is looking to cut cash burn at each cost center. Unacademy was founded in 2015 and raised $440 million from Singapore’s Temasek fund. In August 2021, the company was valued at $3.4 billion.
While it is difficult to believe, the numbers may be a bit misleading. Not all employees are affected equally. In fact, some have been laid off twice in the last six months. The company also retrenched on-roll employees and contracted educators. The company also terminated over 100 other employees, including the founders of Unacademy. The company said in its blog post that the layoffs were necessary to save money and reduce role redundancy.
The Bengaluru-based education tech company laid off over 1,000 people last week. The company, which raised $440 million in venture funding in August, is planning to lay off the remaining 5,000 workers. Most of the people impacted by the layoffs were contractual employees. But other employees were hired as on-roll employees. The company said it plans to acquire Prepladder in 2020. And this move is an example of how a growing tech company should handle a downsizing situation.
The decision to lay off employees reflects the company’s growing challenges. Though the company has over a billion employees worldwide, it has been a highly successful education startup with a burgeoning international presence. It is slated to enter unicorn status by the end of September. The company recently raised $440 million from Temasek and was valued at over $3 billion. The startup’s founders aspire to emulate the leadership style of Steve Jobs and Apple. They prioritize growth over culture.
Meesho fired 150 employees
Meesho, which primarily runs the grocery division Superstore, recently announced the layoffs of 150 employees at Unacademy. The company is currently in the process of integrating Superstore into its core app. The layoffs are not surprising given Meesho’s history of firing employees. Two years ago, it laid off 200 employees during a coronavirus pandemic.
As a start-up, Meesho is no stranger to mass layoffs. It recently raised $570 million from SoftBank Vision Fund and Prosus (formerly Naspers). But a recent report shows that Meesho has not closed its funding round. It has laid off more than 600 employees, which is more than enough to populate dozens of growth-stage startups. But this isn’t a sign of a turnaround, since Meesho went on a massive acquisition spree in the past two years. It also claimed to be focused on unit economics, but a review of the company’s finances reveals a company with a culture of’stressing out’ its employees rather than focusing on revenue or unit economics.
In March 2021, Meesho spent Rs.1 for every dollar it earned. In the same month, the company reported revenue of Rs 792.8 crore. Having one source of income is dangerous, so it’s important to diversify your income streams. Learning new skills and upskilling are two good ways to remain in the game for a long time. And while it’s difficult to quit your day job, at least you’ll have a career in another field.
As Meesho looks to move into the grocery business, it recently rebranded its grocery operation as Meesho Superstore. This move includes the food vertical in its primary app. Meanwhile, Unacademy laid off nearly 600 employees due to lack of performance and role redundancy. Although the move is expected to reduce the number of employees at the company, Meesho’s decision to eliminate redundancies has left employees worried.
Trell laid off nearly 300 people
In an apparent move to cut costs, lifestyle-based social commerce startup Trell plans to lay off nearly 300 people in India. The company employs nearly 50 percent of its workforce in India. Trell recently sold a one percent stake to AppsForBharat, an Indian startup focused on spiritual content. In February 2022, the startup laid off between 150 and 200 employees. The company has denied that the layoffs are due to a cash crunch, but sources say the move reflects the need for a restructuring.
The move comes amid reports that Trell is under investigation by an independent accounting firm, which has linked-party transactions to its finances. The startup’s management and board are expected to take action on the report in the coming weeks. However, it remains to be seen how many employees it will let go. The layoffs are a serious blow for the company’s future. Hundreds of jobs will likely be lost, as Trell has struggled to grow.
While the company was on the verge of raising $100 million from Amazon, its founders were involved in “related party transactions” that led to the decision to lay off employees. They may have been related to BharatPe MD Ashneer Grover, who allegedly set up fake companies to generate false invoices and steal nearly Rs. 50 crore from the company. The couple was subsequently fired from their roles.
Although Trell was founded as a travel and lifestyle app, it pivoted into a social commerce platform after experiencing the Covid virus. Recently, it added shopping experiences to its service. However, the EY investigation has stalled funding talks, and the company has now laid off nearly three-quarters of its workforce. It is unclear how much longer Trell will survive without a new round of investment.
Despite its growth, it remains difficult for startups to survive in the real world. Many of these startups fail to achieve their product-market fit and must layoff their workforce. Financial fraud has also reared its ugly head in recent times, and Ashneer Grover was one of the most visible and successful Indian entrepreneurs. He was accused of stealing money from his own company after a Trell probe revealed irregularities involving founders and related parties.
Pratilipi raises $48 million in Series D round led by Krafton
Online storytelling platform Pratilipi has raised $48 million in a Series D round of funding led by South Korean game developer Krafton. The startup will use the new funds to strengthen its intellectual property (IP) acquisition and development efforts across platforms. The series D round also included existing investors such as Omidyar Network India. Pratilipi has been in operation for seven years and has raised $78.8 million in total funding to date.
In addition to the new funding, Pratilipi has also secured additional investment from existing investors including Unacademy’s Hemesh Singh, Delhivery’s Sahil Barua and Meesho’s Vidit Aatrey. The latest round of funding totals $78.8 million, with the startup planning to use the funds to expand into foreign markets and build its IP.
The investment comes at a time when the company has already expanded its reach into YouTube and web series. In addition to this funding round, Pratilipi has partnered with Krafton to co-produce three more web series. In the next 12-18 months, the company will continue to work with the gaming giant to source interesting stories for its content. The funding round was led by Krafton, with additional participation from Omidyar Network India.
In addition to raising $48 million, Pratilipi has also raised a Series C round led by Tencent. This round was exclusively reported by Entrackr. Pratilipi is a multilingual online literary platform, based in Bangalore. It has an estimated 30 million monthly active users in India. It competes with Helo, YourQuo, and Matrubharti.