Whereas Temasek-backed DeHaat farming market laid off about 5% of its workers final 12 months, different enterprise capital-backed firms like Bijak, Captain Contemporary, BharatAgri and Gramophone have just lately laid off staff, sources inform ET.
The Indore-based founding father of Gramophone sacked round 75 workers throughout November and December final 12 months to deal with reaching profitability over the following few monetary quarters, co-founder and CEO Tauseef Khan advised ET.
The corporate was earlier within the submit enlargement mode Raised $10 million in October 2021 From buyers like Z3Partners and Data Edge. It presently has about 450 workers.
Captain Contemporary, the meat retail platform powered by Tiger International, has been attempting to maneuver its enterprise from home to worldwide markets since April final 12 months.
This train resulted in 120 workers dropping their jobs, founder and CEO Utham Gowda advised ET. Firm analysis greater than doubled to $500 million in March 2022, having raised $50 million.
Uncover the tales that matter to you
BharatAgri, which offers AI-based companies to farmers on a paid subscription foundation, laid off 40 workers in August. The Bengaluru-based firm, which now has 52 workers, attributed the layoffs to a change in the best way it sells services.Additionally learn: Layoffs unfold from ETtech Morning Dispatch to Dunzo, ShareChat, Insurgent Meals and agritech
Whereas DeHaat mentioned the variety of workers let go final 12 months was lower than 100 and that all the layoffs had been based mostly on efficiency and cultural match, Bijak who additionally minimize jobs didn’t reply to ET’s request for remark.
The beforehand unreported layoffs got here after a two-year interval of robust financing exercise. About 63% of the full funding capital invested in agritech has been deployed in India to this point previously two years, in keeping with a report by funding banking agency Avendus Capital in December.
Whereas 2021 noticed $1.22 billion invested in 45 agritech startups, round $796 million entered 30 agritech startups in 2022.
Why these layoffs?
After invested capital faltered, agritech startups elevated hiring exercise, however now these firms are streamlining their operations.
At BharatAgri, for instance, the corporate had a mannequin the place there was a gross sales workforce that was speaking on to customers to promote subscriptions and merchandise. “Over time, our product has developed in such a approach that customers should purchase companies and merchandise with out a telephone name,” founder and CEO Siddharth Dayalani advised ET, explaining the layoffs.
Primarily based in Bengaluru The final time the corporate raised cash was in September 2021 – $6.5 million In a spherical led by Omnivore, with participation from India Quotient and 021 Capital, each of which already personal a stake.
“We see the present surroundings as a boon for the agritech sector as it’s going to clear up quite a lot of the chaos within the house and with out large development pressures quite a lot of firms will come out stronger with higher unit economics,” mentioned Khan of Gramophone.
He added, “Most firms have already taken the suitable steps over the previous two quarters and we count on the outcomes to begin showing this 12 months.”
Enterprise mannequin challenges
“Usually, we’re again to pre-pandemic ranges for 2019 for seed rounds, like $2 million to $3 million; there are some exceptions however a couple of,” mentioned Mark Kahn, managing companion of Omnivore, when requested concerning the present financing local weather within the sector. For different rounds, he added, pre-money rankings are down 33% from their 2021 peak.
Startups within the house are nonetheless discovering preliminary challenges to enterprise fashions, as some have succumbed to an investor-led push to scale gross merchandise worth (GMV) with out an lively deal with gross margin, in keeping with an trade insider.
GMV is the full worth of products offered by the corporate, and the gross margin is the quantity left after subtracting the price of items offered from internet gross sales.
“By way of the enterprise fashions that work in agritech, the enter linkages are doing very effectively, and the output linkages are working very effectively in non-perishable merchandise. In perishables and in branded contemporary produce, they’re solely doing effectively in exports,” he mentioned. Khan. “The entire ‘I purchase greens from farms after which promote them to Kirana’ enterprise mannequin with nothing else is useless.”
Elevating capital has been troublesome previously six or eight months. DeHaat’s $60 million increase in December took a very long time to shut, folks accustomed to the matter advised ET.
“We are able to affirm that DeHaat’s present valuation after Collection E funding is between $700 million and $800 million, which is about an 80% premium from the earlier funding spherical that occurred lower than 13 months in the past,” an organization spokesperson advised ET.
DeHaat is among the many high agritech startups by income, together with Waycool Meals & Merchandise, which claimed to have posted Rs 1,008 crore in income within the fiscal 12 months ending March 2022 (FY22).
Learn additionally: 2022 REVIEW: Fund-hungry startups have laid off practically 18,000 workers
DeHaat, based mostly in Patna and Gurgaon, had revenues up 3.6 instances to Rs 1,274 crore in FY22, in keeping with the spokesperson.
“We’re on observe to ship greater than double that quantity in FY23… We’re on an exponential development trajectory with over 2.5 million farmers and 15,000 DIY facilities anticipated by the top of FY23, which shall be 3 instances the expansion from FY22 Being a well-capitalized group, we purpose to proceed this development trajectory in FY24 as effectively.”
Dahat mentioned it employed 2,000 folks till final 12 months.
“There’s been quite a lot of development these days and that is why firms are stepping up and hiring extra folks… No longer everybody who’s employed will work on the identical stage, so that you’re hiring little or no, similar to huge firms do and preserve,” mentioned Akanksha Malik, founding father of Growth360. , which helps startups rent mid- to senior-level folks.
Omidyar Community India and Sequoia Surge-backed Bijak have additionally been tightening their insurance policies on advertising and marketing and personnel prices just lately, a number of sources advised ET.
Three trade insiders confirmed that PJAC has laid off a number of workers. ET couldn’t verify the precise variety of layoffs.
Nevertheless, Kahn of Omnivore, an investor in Bijak, denied the allegations and advised ET that Bijak has years of funding left and no motive to chop its workforce.
The corporate operates a B2B agricultural commodity buying and selling market for agricultural suppliers and patrons, a barely busier market inside agritech, competing with the likes of Lightrock-backed WayCool Meals and Merchandise, Arya-backed Quona Capital, Prosus-backed Vegrow and Walmart-backed. ninjacart.
“There isn’t a dearth of capital to put money into the sector…however the query is what value are buyers prepared to pay. That is the place quite a lot of offers get caught,” Hemendra Mathur, enterprise companion at Bharat Innovation Fund and co-founder of ThinkAg, advised ET.
(drawings and illustrations by Rahul Awsti)