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In a significant downsizing move, Bengaluru-based startup ReshaMandi, specializing in silk yarn products, has laid off 80% of its employees after failing to secure Series B funding. This substantial reduction comes after a year of operational downsizing, where the company’s workforce shrank from 500 employees in January 2023 to approximately 100 by the end of the year.
Reports indicate that around 300 former employees are still awaiting their final dues and salaries. The company, founded in 2020, raised over $40 million in equity funding from prominent investors such as Creation Investments, Omnivore, Venture Catalysts, and others. Additionally, ReshaMandi secured nearly ₹300 crore in debt from venture debt investors and lenders.
However, the company faced financial difficulties after a rapid expansion across various verticals following their fundraising efforts in October 2021. Employees quoted by Inc42 suggested that the company succumbed to a “growth-at-all-costs” mindset, leading to inflated revenues in FY23 and FY22. It is believed that investors like Temasek may have become aware of the allegations now being raised by employees on social media and in conversations with the media.
Starting in June 2023, employees were reportedly given the option to continue working without pay for three months before being let go. The financial strain and the inability to secure additional funding have led to significant layoffs, impacting the lives of many of ReshaMandi’s workforce.
Sources By Agencies
