Tiger Global-backed unicorn Moglix joins layoff league

Industrial goods marketplace Moglix has become the latest Indian unicorn to let go off employees, sources familiar with the development told Moneycontrol.

The B2B marketplace, backed by investors such as Tiger Global and Alpha Wave, joins a growing list of companies that have laid off staff, amid an increasingly pessimistic macro environment.

While sources said that 200 employees or 15 percent of Moglix workforce would likely be impacted, Moglix told Moneycontrol in a statement that 2 to 3 percent or about 40 of its workforce was impacted after an annual review of employees' performances.

“We have hired 700+ people this year and continue to expand with a target to hire 300+ people for 2023. We keep a watch out for low performers and continue to automate tasks, for which annually 2-3 percent people can be impacted,” the company said in a statement in a response to the queries sent by Moneycontrol. It did not provide further details on its total employee count.

This comes almost a year after Moglix raised $250 million in a Series F round led by existing investor Tiger Global and Alpha Wave with new investor Ward Ferry, valuing it at $2.6 billion, more than double its valuation from May 2021, as B2B marketplaces grew faster than ever during the pandemic.

The Singapore-based company’s gross revenue grew to $306.9 million in the latest fiscal year (FY) 2022 from $105.2 million in FY21, according to the firm’s annual financial statements. With a 2.8x jump in the cost to $327.9 million, Moglix saw its losses grow 88.1 percent at $21.03 million in FY22 from $11.18 million in FY21.

Founded by Rahul Garg, a former Google executive, in 2015, Moglix sells a wide range of industrial tools, including hammers, drills, wrenches, office stationery and supplies, hospital supplies, and automotive supplies.

Moglix has been among the many startups tackling the business-to-business e-commerce space in India, seen as a huge market ripe for disruption after the likes of Flipkart grew in the consumer-facing e-commerce domain. Its peers OfBusiness and Infra.market have also seen their valuations balloon in the last couple of years.

With funding drying up, a number of companies, including the most well-funded, have laid off large numbers of employees since the beginning of 2022 impacting close to 20,000 staff, according to data compiled by Moneycontrol.

The mass layoffs followed a year of aggressive hiring and high employee costs as tech salaries skyrocketed in 2021, a time when new-age tech startups led the talent war to support their unprecedented growth with funds pouring into the Indian startup ecosystem.