As cost optimization becomes a bigger consideration for start-ups’ overgrowth, Business-to-Business (B2B) e-commerce unicorn Udaan is cutting 300-350 on-roll employees.
The company has already experienced two rounds of layoffs in around five months. 180 employees of the Bengaluru-based business received pink slips in June.
Along with the on-roll workforce, the company is also asking a number of its contractual workers who work in sales, business development, and warehouses to leave. The number of impacted off-roll employees is still unknown.
The company acknowledged the layoffs, but it would not disclose how many employees were affected.
“As we move forward in our journey towards making Udaan a profitable company, the efficiency enhancement drive and the evolution in the business model has created some redundancies in the system, with some roles no longer required. As a responsible organisation, we are working towards providing all required support to the impacted employees,” a company spokesperson said in a statement.
Notably, the development occurs only a few days after the business completed a new round of debt and convertible notes financing totalling $120 million, which was sponsored by current shareholders and bondholders.
Aditya Pande, the chief financial officer of Udaan, announced the funding in an internal email to the company’s staff last week. He claimed that through improving gross margins and operating costs, the company had been able to increase unit economics by about 1,000 basis points.
“The journey of right business design and unit economics has translated into a 60 per cent + reduction in a burn. Continued focus on customer-first thinking & initiatives on strengthening our value proposition for them have resulted in monthly buyer repeat rates increasing by 500+bps in the last 2 quarters,” Pande said in his email.
According to market research site Tracxn, Udaan was valued at $3.1 billion as of January 5, 2022. It has 22 investors backing it, including companies like Lightspeed Ventures, GGV Capital, Tencent, DST Global, and others.
“We will continue to invest to build Udaan as a professionally run organisation with scale, capabilities and resilience that can leverage the huge opportunity that Kirana commerce offers while empowering the small businesses of Bharat,” the spokesperson said.