Indian trade financing startup Drip Capital lays off over 75 employees in a restructuring exercise
- ByStartupStory | April 14, 2023
Sources have revealed that trade financing startup Drip Capital laid off more than 75 employees without providing a clear explanation for the decision. This comes just one year after the company raised $175 million in a funding round in October 2021. The sudden layoffs have left employees perplexed, as Drip Capital had informed them in September 2022 that the business was performing well.
In November of last year, Drip Capital, an Indian trade financing startup based in California and Mumbai, underwent a restructuring exercise that resulted in the layoff of over 75 employees, about 20% of its 400-member workforce, according to insiders who spoke with Inc42. The layoffs impacted workers in various teams, with the technology, engineering, and sales departments being the most affected. The sources claimed that the startup did not provide any clear explanation for the layoffs.
According to sources, CEO Pushkar Mukewar announced a business restructuring plan during a town hall meeting with all employees in mid-November of last year, and shortly thereafter, affected employees were asked to resign via email. The majority of those impacted were from teams based in India, though a few from teams in the US and Mexico were also let go.
Drip Capital, a fintech startup that offers digitized trade financing solutions to small and medium businesses (SMBs) in India, the US, and Mexico, provided a two-month salary as severance pay to the affected employees and cleared their full and final payments within 15 days. Drip Capital was established in 2016 by Pushkar Mukewar and Neil Kothari. In October 2021, the company raised $175 Mn in a funding round, which included $40 Mn in Series C investment and $135 Mn in warehouse debt facilities. TI Platform, Accel, Sequoia, Wing VC, and Irongrey are among the investors in the company. The layoffs were announced just a year after the funding round.
At the same time when Drip Capital laid off over 75 employees in November last year, the startup was also giving appraisals to many of its employees. Furthermore, months after the layoffs, the company is now hiring for multiple positions.
The layoffs at Drip Capital are part of a wider trend of Indian startups, including unicorns like OYO, BYJU’S, and Dunzo, cutting costs and increasing their runway amid the ongoing funding winter. According to reports, at least 88 startups have laid off over 25,000 employees since 2022.
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