E-commerce firm Dealshare lays off 6% of its workforce
- ByStartupStory | January 27, 2023
Dealshare, an ecommerce firm, has laid off approximately 100 employees, or more than 6% of its 1,500-person workforce, ET reported.
Sourjyendu Medda, the founder of Dealshare, stated that the decision is linked to the company’s business plan for the coming fiscal year, with a focus on profitability.
“Given the massive market downturn that started early-to-mid last year, we had to rethink our business strategy and correspondingly make changes to our execution plan,” he told ET. “From a strong focus on growth to achieve a large market share, we made substantial changes to our plans to focus on first driving profitability.”
The move has helped the firm, which is backed by Tiger Global, Matrix Partners, and Alpha Wave Global, reduce its monthly burn “to less than 40% of our peak burn” and increase its cash runway to close to four years, according to Medda.
Dealshare now joins a growing number of startups that have laid off employees in the new year to cut costs and streamline operations in the face of a prolonged funding crunch and slowing growth.
According to people familiar with the matter, Dealshare’s annualised gross merchandise value (GMV) run-rate has dropped by one-third to around $600 million from its peak GMV run-rate of $900 million (based on current dollar rate) last year.
The firm “has also seen its gross sales drop as it has been trying to cut down on burn”, one of them said.
Medda said, Dealshare has reduced its focus on various initiatives and contained its geographical spread, which would have needed cash investments for long “before becoming totally profitable, resulting in our gross revenue getting rationalised to close to 60% of our peak revenue”.
Last year, the Bengaluru-based company expanded to about 150 cities and towns, and it has now paused operations in the bottom 20% of these.
Dealshare, founded in 2018 as a group buying platform by Medda, Vineet Rao, Rajat Shikhar, and Sankar Bora, has been repositioning itself as a direct-to-consumer ecommerce firm, offering a variety of products to low-income consumers. It sells groceries and other necessities, as well as general merchandise and some fashion items, primarily in the Rs 300-400 average selling price range.
In January last year, Dealshare was declared a unicorn after closing a $165-million funding round from Tiger Global, Alpha Wave and others.
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