Udaan fires over 100 employees days after securing $340 million in capital
Summary
Days after it secured $340 million in capital, B2B e-commerce unicorn Udaan has fired around 150 employees, or about 10 percent of its entire workforce, people aware of the developments told Moneycontrol. "While employees have been let go, Udaan is also improving its financial health by exiting regions like Vishakapatnam which have failed to yield desired results for Udaan, another person cited above told Moneycontrol.Udaan, which sells groceries and other products to kirana stores who further re-sell to customers, is similar to what DealShare used to do earlier in B2B. Tiger Global-backed DealShare however shuttered its B2B unit earlier this year and fired all employees from the division because the margins were too thin and the unit economics did not make sense, as reported earlier.Startups like Udaan typically operate with a net margin of about 8-11 percent.This is the second instance, in the last 13 months, where Udaan has sacked staffers soon after it raises a new round of capital. The Bengaluru-based company fired at least 500 employees across two rounds (June and November) in 2022.The cost cutting exercise comes at a time when Vaibhav Gupta, co-founder and CEO, Udaan, said his company will be profitable and will be ready for an initial public offering (IPO) in 12-18 months. The dip in revenues was largely because Udaan burnt lesser money and managed to narrow its losses to Rs 2,213 crore in FY23 from Rs 3,075.8 crore in FY22.Founded by former Flipkart executives, Sujeet Kumar, Amod Malviya and Gupta in 2016, Udaan has raised over $1.8 billion from investors like Tencent, DST Global and several others, as per Tracxn, a private markets data provider.While Kumar and Malviya stepped down from active roles in 2022, they continue to hold equity in the company as CEO Gupta runs the show.