Amid a tough funding environment for tech startups and macroeconomic headwinds, e-commerce unicorn Dealshare has laid off 100 employees, cutting its employee strength of 1,500 by around 6 percent.
“We took the decision in order to rationalise expenses… Some of the projections that we had made for the business are being re-looked at due to macro-economic factors,” Dealshare founder and co-CEO Sourjyendu Medda told Moneycontrol.
“The layoffs happened because of the need to rationalise the business and the change in strategy… We don’t have to worry about cash in the bank as we have a runway of 4 more years,” he said.
As a result of the reduction in discretionary spends by consumers, Dealshare’s annualised revenue rate has fallen by a third to around $600 million from the peak of $900 million achieved at a certain point last year. Startups typically define annualised revenue rate as the 12-month extrapolation of the last month’s revenue.
The company has also succeeded in bringing its monthly cash burn down by more than 60 percent to around $4 million, compared to the peak last year. Meanwhile, it is also pivoting away from the group buying model to a new social commerce model.
“The plan is to have a sharper focus on the geographies we are strong in and not go for any more expansion in the near future,” he added.
The Tiger Global-backed company is present across 130-140 cities currently.
In the last couple of weeks e-commerce unicorn Swiggy has laid off 380 employees and social media unicorn Sharechat has let go of nearly 600 of its staff, with no end in sight for the funding winter for startups.
Byju's has let go of 2,500, Ola 2,100, Unacademy 1,190, Vedantu 1,109, Udaan 530 and Meesho 450 in recent months. According to data compiled by Moneycontrol, Indian startups have already laid off more than 1,000 employees in 2023 and at least 20,000 employees since the start of 2022.
Last year, Dealshare entered the unicorn club as it raised around $210 million in its Series E round. At the close of the round, the startup had hit a valuation of $1.7 billion.
The company’s revenue had increased around 8 times to Rs 1,933 crore in FY22, whereas the loss widened over times to Rs 431 crore. Medda said that he expects growth to moderate in FY23, but still the company is on track to expand its revenue by 50 percent during the period.