Whereas Temasek-backed DeHaat farming market laid off about 5% of its employees final yr, different enterprise capital-backed firms like Bijak, Captain Recent, BharatAgri and Gramophone have not too long ago laid off staff, sources inform ET.
The Indore-based founding father of Gramophone sacked round 75 staff throughout November and December final yr to deal with attaining profitability over the subsequent few monetary quarters, co-founder and CEO Tauseef Khan informed ET.
The corporate was earlier within the put up growth mode Raised $10 million in October 2021 From buyers like Z3Partners and Information Edge. It at the moment has about 450 staff.
Captain Recent, the meat retail platform powered by Tiger International, has been making an attempt to maneuver its enterprise from home to worldwide markets since April final yr.
This train resulted in 120 staff dropping their jobs, founder and CEO Utham Gowda informed 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 gives AI-based companies to farmers on a paid subscription foundation, laid off 40 staff in August. The Bengaluru-based firm, which now has 52 staff, attributed the layoffs to a change in the way in which it sells services and products.Additionally learn: Layoffs unfold from ETtech Morning Dispatch to Dunzo, ShareChat, Insurgent Meals and agritech
Whereas DeHaat mentioned the variety of staff let go final yr was lower than 100 and that the entire layoffs have been primarily based on efficiency and cultural match, Bijak who additionally reduce jobs didn’t reply to ET’s request for remark.
The beforehand unreported layoffs got here after a two-year interval of sturdy financing exercise. About 63% of the overall funding capital invested in agritech has been deployed in India up to now prior to now two years, in line 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 advanced in such a manner that customers can buy companies and merchandise with out a telephone name,” founder and CEO Siddharth Dayalani informed ET, explaining the layoffs.
Based mostly 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 setting as a boon for the agritech sector as it is going to clear up a whole lot of the chaos within the area and with out huge progress pressures a whole lot of firms will come out stronger with higher unit economics,” mentioned Khan of Gramophone.
He added, “Most firms have already taken the proper steps over the previous two quarters and we count on the outcomes to start out showing this yr.”
Enterprise mannequin challenges
“Generally, 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 associate 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 area 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 energetic deal with gross margin, in line with an business insider.
GMV is the overall worth of products bought by the corporate, and the gross margin is the quantity left after subtracting the price of items bought from web gross sales.
“By way of the enterprise fashions that work in agritech, the enter linkages are doing very properly, and the output linkages are working very properly in non-perishable merchandise. In perishables and in branded contemporary produce, they’re solely doing properly in exports,” he mentioned. Khan. “The entire ‘I purchase greens from farms after which promote them to Kirana’ enterprise mannequin with nothing else is lifeless.”
Elevating capital has been troublesome prior to now six or eight months. DeHaat’s $60 million increase in December took a very long time to shut, folks conversant in the matter informed ET.
“We will verify that DeHaat’s present valuation after Sequence 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 informed ET.
DeHaat is among the many prime agritech startups by income, together with Waycool Meals & Merchandise, which claimed to have posted Rs 1,008 crore in income within the fiscal yr ending March 2022 (FY22).
Learn additionally: 2022 REVIEW: Fund-hungry startups have laid off almost 18,000 staff
DeHaat, primarily based in Patna and Gurgaon, had revenues up 3.6 occasions to Rs 1,274 crore in FY22, in line with the spokesperson.
“We’re on observe to ship greater than double that quantity in FY23… We’re on an exponential progress trajectory with over 2.5 million farmers and 15,000 DIY facilities anticipated by the tip of FY23, which will probably be 3 occasions the expansion from FY22 Being a well-capitalized group, we intention to proceed this progress trajectory in FY24 as properly.”
Dahat mentioned it employed 2,000 folks till final yr.
“There’s been a whole lot of progress recently and that is why firms are stepping up and hiring extra folks… No longer everybody who’s employed will work on the identical degree, so that you’re hiring little or no, identical to huge firms do and maintain,” 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 not too long ago, a number of sources informed ET.
Three business insiders confirmed that PJAC has laid off a number of staff. ET couldn’t confirm the precise variety of layoffs.
Nonetheless, Kahn of Omnivore, an investor in Bijak, denied the allegations and informed 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 spend money on the sector…however the query is what value are buyers keen to pay. That is the place a whole lot of offers get caught,” Hemendra Mathur, enterprise associate at Bharat Innovation Fund and co-founder of ThinkAg, informed ET.
(drawings and illustrations by Rahul Awsti)