DealShare to layoff 130 employees as it decides to shut B2B unit

Under its B2B model, DealShare sold goods to kiranas, who further sold to individual customers. It also tapped into the network of kirana stores to complete last mile deliveries.

Tiger Global-backed e-commerce platform DealShare has decided to fully wind down its business-to-business (B2B) unit over the next few months as the vertical has failed to yield desired results, people aware of the developments said to Moneycontrol. The company has already begun scaling down its B2B division and has announced another round of layoffs, the people requesting anonymity added.

The cost-cutting exercise comes months after Moneycontrol had reported that the company is consolidating operations, by exiting markets and even shifting its headquarters from Bengaluru to Delhi NCR, a move which would likely result in more layoffs. The decision to shift its base was after DealShare had already let go of 100 employees while rationalising its business in January.

In a company-wide townhall meeting held earlier this month, DealShare said it would be sacking 120-130 employees, which represents just over 10 percent of its total workforce. Before the decision was announced, DealShare had 1,100 employees on its payroll.

Management view

Most of the impacted employees are from the B2B side of the business, per sources. DealShare confirmed the developments to Moneycontrol.

“We…took a conscious decision to focus on the B2C business at this point to stay relevant to our consumers in the market. We have taken decisions of realigning our budgets, reorganising teams, and locations etc. Our immediate priorities will be to quickly organise the teams towards execution, complete the non-tech teams' transition to Gurugram, prioritise key deliverables, and swing into action,” a spokesperson for DealShare said.

The B2B division, while smaller than the B2C unit, still accounted for about 20-25 percent of DealShare’s revenue. In FY22, the latest available data, the company had clocked a revenue of around Rs 1,930 crore, an 8X increase YoY, while its losses widened 540 percent to about Rs 430 crore.

“As a result of this re-organisation some of our colleagues will be leaving us. The company will do everything in our capacity to support them through this transition both financially and leveraging our networks to provide for a soft landing,” the statement added, but did not provide specifics on what assistance the affected employees will receive.

DealShare has also been strengthening its offline footprint and is consolidating its business to focus on markets such as Jaipur, Delhi NCR, Lucknow and Kolkata, while exiting unprofitable regions like Maharashtra among others.

Founded in 2018, the going has gotten tough for DealShare which is still struggling to find its product-market fit (PMF). In July, DealShare’s CEO and co-founder Vineet Rao also quit the company to make way for a professional to lead the business. The company is yet to formally announce a new executive.

This at a time when the company is positioning itself as a D2C-focused startup rather than being a group buying platform like in its initial days. DealShare largely focuses on the low-income cohort of shoppers and sells groceries, general merchandise, fashion items, among several other stock keeping units (SKUs).

Under its B2B model, DealShare sold goods to kiranas, who further sold to individual customers. It also tapped into the network of kirana stores to complete last mile deliveries. On the B2B side, it competes with Accel-backed Citymall, Lightspeed-funded Udaan, and a few others.

Started by Rajat Shikhar, Vineet Rao, Sankar Bora, and Sourjyendu Medda, DealShare has raised over $390 million in total from Alpha Wave Global, ADIA, WestBridge Capital, Matrix Partners India, and several others. In its last round, where it raised $165 million in January 2022, DealShare was valued at $1.7 billion, as per Tracxn, a private markets data provider.