In Pics: Has the Indian startup party halted? Recent layoffs leave thousands unemployed
Unicorn surviving to struggle
April only saw about $3.4 Bn in funding with no unicorns being produced. In March, the edtech unicorn Unacademy laid off more than 200 teachers in a cost restructuring exercise. In early April, the startup laid teachers off again, this time firing 600 teachers.
Venture capitalists say cut costs
During the first five months of 2022, India has seen $16 Bn in startup funding, while the funding amount is surely more than last year, the momentum that was achieved towards the end of 2021 has fizzled out. This has led venture capital firms such as Sequoia and Y Combinator to instruct the startups on how to survive - there is a clear message: cut costs and increase runway.
The Bengaluru-based gold loans provider Rupeek laid off 200 people in a bid to cut costs.
Thousands of livelihoods disrupted
Many of these startups have disrupted thousands of livelihoods in the process by laying off employees as a “cost-cutting exercise.”
Extracurricular edtech startup FrontRow laid off 145 employees across sales, quality control and HR teams. The layoff, impacting almost a third of the startup’s total employees, has been done to cut costs and increase the startup’s runway.
Funding winter
The startup ecosystem now braces for a funding winter and subsequent slowdown. Gurugram-based edtech startup Udayy said that it will be shutting down operations, three years after it was founded by Saumya Yadav in 2019. This has left 100 people that it employed without a job.
Crashing dreams
Invact Metaversity, founded by ex-Twitter India head Manish Maheshwari, started as a promising edtech startup, offering a 16-week MBA alternative for around INR 2 Lakh. The first course was supposed to start on May 12. However, even before anything like that, the Metaversity is all but closed up, having laid off 20 out of the 30 employees that were working from the Bengaluru office.
More coming?
Recently, the Bengaluru-based gold loans provider Rupeek laid off 200 people in a bid to cut costs. And, with the world moving towards a recession, it is expected that more layoffs are on their way.
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