Healthtech startup MFine, run by Novocura Tech Health Services, has laid off over 500 employees amid a funding crunch at the Beenext and Stellaris-backed startup, according to employees Moneycontrol spoke to.
The Bengaluru-based startup has about 1,000 employees, according to sources, and has laid off employees across data science, engineering and product departments. A few employees working in the talent acquisition team, who were asked to hire over the last few weeks, were also laid off. Employees were told that the startup is short on funds to release salaries for coming months.
“We were hiring over the last month or so across departments, and we were hiring freshers, mostly or lesser experienced people,” said an employee requesting anonymity.
“But this exercise is a restructuring exercise where they are hiring at lesser salaries to stay as a going concern as they are short of funds to pay salaries,” the employee added.
Inc42 reported the story first, saying that the company has fired over 600 employees or about 80% of its workforce. An email query sent to MFine did not elicit any immediate response.
Mfine, who also counts Prime Venture partners, Caretech Group,SBI Ven Capital, SBI AI and Blockchain LPS among others as its backers, was founded in 2017 by former Myntra founder Ashutosh Lawania and former Chief Business Officer at Myntra, Prasad Kompalli.
MFine’s platform offers consultation with doctors and partners with hospitals, clinics, diagnostics, and radiology service providers. The company also offers discounted health checkup packages in tieups with the hospitals.
Last year, MFine had claimed that it provides its users access to more than 700 diagnostic centres across 400 cities in India. The company had also claimed that over one lakh users use MFine for booking diagnostic tests every month, and the company had more than 6,000 doctors across 35 specialties on its platforms and claimed to serve in over 1,000 towns. The company said it was growing at 15 percent on a month-on-month, as adoption of telemedicine and digital health in India was rising rapidly.
MFine had raised over $80 million in 2021 alone and was last valued at over $400 million. However, for 2020-21 (FY21), the company had reported a loss of more than Rs 102 crore on a revenue of Rs 12.9 crore, according to data available on the Ministry of Corporate Affairs (MCA). To be sure, despite an over 100 percent jump in its FY21 revenue on a year-on-year basis, the company’s loss widened to Rs 102 crore from a little over Rs 99 crore a year earlier.
MFine joins a growing list of high-funded tech startups in India to lay off employees. This week, alone, three startups have laid off nearly 2,000 employees. Moneycontrol reported on May 18 that Tiger Global-backed edtech unicorn Vedantu laid off 424 employees citing funding crunch, while SoftBank-backed Cars24 laid off more than 600 employees in a cost cutting exercise.
Owing to volatility in global financial markets, startups that were thriving on venture funding over the last two years, are forseeing a drop in funding this year and are thus taking initiatives like mass layoffs to cut costs. In 2022 so far, startups have fired over 5,000 employees according to data compiled by Moneycontrol.