Two-wheeler rental startup Bounce laid off nearly 80 percent of its workforce totalling at least 300 people, including senior leaders, as part of a desperate cost-cutting exercise to survive the hard knocks of the pandemic slowdown.
Only founders in senior roles remain at the Sequoia Capital and Accel-backed firm whose post-pandemic recovery has been slower than expected, said four people familiar with the matter.
When contacted, Bounce CEO Vivekananda Hallekere, "Can’t comment on the names. Layoffs are not 80 percent as such. We have recently done some rationalisation at Bounce keeping our long term goals in mind. 2020 has affected mobility more than any sector. During 2019 we wanted to go after platform play and we had hired accordingly to go after multiple mobility solutions."
"Given how 2020 has been we have decided to focus on EV two-wheeler mobility and double down on our efforts around electrification. Accordingly, we have made some decisions that have affected a few employees at Bounce who will not be part of the organisation. We are working with the impacted Bounce employees to get them placed in other organisations, " he responded by email.
Senior employees who have been laid off include those steering products, operations, HR and engineering. They did not immediately respond to Moneycontrol's queries seeking comment.
Frequently Asked Questions
A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.
There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.
Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.
The massive layoffs mean that at least four rungs in the top deck are empty, according to one of the persons cited above. “There is no other senior person left,” the person said.
Bounce now has 70 employees remaining to run a business that was last valued at $450 million. At its peak, the company had 600 people on its rolls.
Bounce laid off 130 employees, or 22 percent of its staff, in June 2020.
The Economic Times newspaper reported on February 22 that Bounce laid off 200 people that constituted 40-60 percent of its workforce.
Cutting people cost has been one of the company’s biggest priorities and it has done so in phases. Most other startups hit by the pandemic fired people only once, but cut deep enough to become sustainable.
Bounce had an employee cost of about Rs 21 crore a month before the pandemic, said another person cited above.
The company brought down that cost to Rs 7 crore a month after the pandemic, which will reduce to Rs 1 crore a month after the latest round of layoffs, this person said.
All the persons Moneycontrol spoke to did not want to be named.
Bounce is still well funded, having raised a $97 million round two months before the pandemic. But revenue has not recovered to pre-pandemic levels yet.
Bounce earned Rs 8-10 crore of revenue a month in January last year. Revenues have since dropped to about Rs 1 crore a month, with a fleet of 3,000 scooters plying, mainly in Bengaluru.
Bounce was founded as Wicked Rides in 2014 by Vivekananda HR, Varun Agni, and Anil G. While they offered premium motorcycle rentals under Wicked Rides, they later added commute bikes under the Metro Bikes label.
The company was rechristened as Bounce in August 2018. It raised capital quickly in the pursuit of market leadership, and accumulated about $180 million just in 2019, with its valuation doubling and tripling in each round.Bounce was valued at $450 million when it last raised $97 million in late 2019 led by Falcon Edge Capital, B Capital, Accel, Maverick Ventures and Chiratae Ventures.