Business-to-business unicorn Udaan is firing up to 350 employees in the second round of layoffs since June, as the startup aims to improve its efficiency and achieve profitability.
About 10% of the company’s 3,000-permanent workforce will be impacted with the layoff, a person close to the development told VCCircle. Earlier, in June, the company had fired 180 executives as part of the startup’s cost rationalisation process.
With this, Udaan joins a series of startups that had to lay off employees, as they prioritize profitability amidst a funding slowdown.
The development was first reported by The Morning Context, which said the number is estimated to be upwards of 30% of its workforce, or around 1,000 people. However, the person above said, of those fired, while 300-350 were on company payroll, the remaining are likely to be on contract.
“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,” Udaan said in a statement.
“We are working towards providing all requisite support to the impacted employees,” the statement further said.
However, the company did not disclose the details on severance offered to existing employees.
Last week, Aditya Pande, Udaan’s chief financial officer, had told the employees in an internal email that it had raised $120 million (around Rs 960 crore) in convertible notes and debt, led by existing shareholders and bondholders. The fundraise took the total capital raised by Udaan through convertible notes and debt in the last four quarters to over $350 million.
So far, the company has raised more than $1.5 billion in equity and debt.
The startup is also aiming for a public market listing over the next 12-18 months.
“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,” Udaan said.
Former Flipkart employees Amod Malviya, Sujeet Kumar and Vaibhav Gupta co-founded Udaan in 2016. It connects traders, wholesalers, retailers and manufacturers on a single platform, allowing them to find clients, suppliers and products across categories and connect with one another directly for the cheapest price.
Earlier in January, Udaan had raised $250 million, which comprised $200 million worth of convertible notes or short-term debt that can subsequently be converted to equity and $50 million of debt.
Microsoft Corporation had joined the company's fundraise in April this year in a $225 million round. It is also backed by investors including Octahedron Capital, Moonstone Capital, Lightspeed Venture Partners, DST Global, GGV Capital, Altimeter Capital and Tencent among others.
