Whereas Temasek-backed DeHaat farming market laid off about 5% of its workers final 12 months, different enterprise capital-backed corporations like Bijak, Captain Contemporary, BharatAgri and Gramophone have lately laid off staff, sources inform ET.
The Indore-based founding father of Gramophone sacked round 75 staff throughout November and December final 12 months to give attention to attaining profitability over the subsequent few monetary quarters, co-founder and CEO Tauseef Khan informed ET.
The corporate was earlier within the publish growth mode Raised $10 million in October 2021 From traders like Z3Partners and Data Edge. It presently has about 450 staff.
Captain Contemporary, the meat retail platform powered by Tiger World, has been attempting to maneuver its enterprise from home to worldwide markets since April final 12 months.
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.
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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 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 staff let go final 12 months was lower than 100 and that the entire layoffs had been primarily based 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 up to now up 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 corporations are streamlining their operations.
At BharatAgri, for instance, the corporate had a mannequin the place there was a gross sales crew that was speaking on to customers to promote subscriptions and merchandise. “Over time, our product has advanced in such a approach that customers can buy companies and merchandise with no 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 surroundings as a boon for the agritech sector as it’ll clear up quite a lot of the chaos within the area and with out large progress pressures quite a lot of corporations will come out stronger with higher unit economics,” mentioned Khan of Gramophone.
He added, “Most corporations have already taken the proper 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 just a few,” 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 scores 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 give attention to gross margin, in line with an business 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 web gross sales.
“When it comes to the enterprise fashions that work in agritech, the enter linkages are doing very nicely, and the output linkages are working very nicely in non-perishable merchandise. In perishables and in branded contemporary produce, they’re solely doing nicely 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 up to now six or eight months. DeHaat’s $60 million increase in December took a very long time to shut, folks aware of the matter informed ET.
“We are able to 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 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 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 monitor 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 top of FY23, which might be 3 occasions the expansion from FY22 Being a well-capitalized group, we purpose to proceed this progress trajectory in FY24 as nicely.”
Dahat mentioned it employed 2,000 folks till final 12 months.
“There’s been quite a lot of progress these days and that is why corporations are stepping up and hiring extra folks… Not everybody who’s employed will work on the similar degree, so that you’re hiring little or no, identical to huge corporations 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 personnel prices lately, a number of sources informed ET.
Three business insiders confirmed that PJAC has laid off a number of staff. ET couldn’t verify 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 is no such thing as a dearth of capital to put money into the sector…however the query is what value are traders prepared to pay. That is the place quite a 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)