The impact of the startup funding winter has extended to the fintech space with gold loans platform Rupeek saying it has laid off 10-15 percent of its employee base.
Rupeek, the first fintech to layoff employees amid tough marco conditions, has over 1,200 employees and has laid off over 180 people.
In a statement the company said, "With deep regret, we have taken the difficult decision to part ways with 10-15 percent of the employees. The subdued macroeconomic environment has compelled us to re-calibrate our strategy, relook at our costs and make our organisation structure leaner, so as to support our sustenance and growth."
"We acknowledge the selfless contributions made by all the employees who are being impacted and we are committed to supporting them through this transition," the company added.
The company's founder and CEO Sumit Maniar informed wrote an email to employees on this decision.
The mail which was seen by Moneycontrol read, "We conducted a thorough exercise, and have decided to keep the right fitment of the workforce required, aligned with our revised strategic plans. This was definitely one of the most difficult processes that we as an organization had to go through."
Maniar added that the company has seen 2x growth in the last two quarters and that the company's business model is structurally well placed to continue growing at a healthy speed.
"Unfortunately, while this restructuring was imperative, we are yet to ascertain when the industry will hit normalcy and recover fully," the mail added.
The company had last raised $34 million on January 11 led by Lightbox and other existing investors. Back then the company had said that it doubled its gold loan disbursals in December 2021 as compared to 2020.
The company also recorded an annual disbursement run rate of $1 billion in December 2021. According to Rupeek, it was the first asset-backed lending company to have reached this milestone in the fintech space.
The move by Rupeek comes in the background of widespread layoffs by startups, many by edtechs. Over 6,000 employees have been laid off by startups including Unacademy, Vedantu, Eruditus, Cars24, MFine, Lido, among others.
Startups that were hoping to raise funds riding on the momentum of 2021 are now finding it difficult to bag high valuations with the growing focus on unit economics and VCs becoming conservative on their investments.
Most investors lost big in the stock market crash that began with the fears of the Russia-Ukraine war.
Companies are also shifting their focus to profitability and stronger unit economics from growth and expansion to prepare a runway for the near to medium-term, expecting the funding slowdown to last for another 18-24 months.
For instance, last month, in a letter to his employees, Gaurav Munjal of SoftBank-backed Unacademy said that the company should focus on profitability at all costs.
Many venture capital firms, including some of the biggest like Sequoia Capital, Y Combinator, and Beenext, are increasingly advising their founders to cut extra marketing spends and build stronger unit economics.