Whereas Temasek-backed agriculture market DeHaat fired about 5% of its staff final 12 months, different enterprise capital-backed corporations like Bijak, Captain Recent, BharatAgri and Gramophone too have not too long ago undertaken layoffs, sources informed ET.
Indore-based Gramophone let go of round 75 staff throughout November and December final 12 months to concentrate on reaching profitability over the subsequent few monetary quarters, cofounder and chief government Tauseef Khan informed ET.
The corporate was earlier in an growth mode after having raised $10 million in October 2021 from buyers like Z3Partners and Information Edge. It at present has round 450 staff.
Captain Recent, the Tiger International-backed farm-to-retail platform for meat, has been making an attempt to maneuver its enterprise from home to worldwide markets since April final 12 months.
This train has led to 120 staffers shedding their jobs, founder and CEO Utham Gowda informed ET. The corporate’s valuation greater than doubled to $500 million in March 2022, after having raised $50 million.
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BharatAgri, which provides farmers AI-based companies on a paid subscription foundation, sacked 40 staff in August. The Bengaluru-based firm, which now has 52 staffers, attributed the layoffs to a change in the way in which it sells services and products.Additionally learn: ETtech Morning Dispatch layoffs unfold to Dunzo, ShareChat, Insurgent Meals, and agritech corporations
Whereas DeHaat stated the variety of staffers let go of final 12 months was lower than 100 and that every one the layoffs had been based mostly on efficiency and cultural fitment, Bijak that too has reduce jobs didn’t reply to ET’s request for remark.
The beforehand unreported layoffs have come after a interval of two years of sturdy funding exercise. About 63% of the full enterprise capital invested in agritech in India to date had been deployed within the final two years, as per a report from funding banking agency Avendus Capital in December.
Whereas 2021 noticed $1.22 billion being invested in 45 agritech startups, about $796 million got here into 30 agritech startups in 2022.
Why these layoffs?
After having snagged investor capital, agri-tech startups heightened hiring exercise however these firms are actually streamlining operations.
At BharatAgri, for example, the corporate had a mannequin the place there was a gross sales group that was straight speaking to customers to promote subscriptions and merchandise. “Over time, our product has developed in such a approach that customers are in a position to buy the companies and merchandise and not using a telephone name,” founder and CEO Siddharth Dialani informed ET, reasoning the layoffs.
The Bengaluru-based firm final raised funds in September 2021 – $6.5 million in a spherical led by Omnivore, with participation from India Quotient and 021 Capital, each of which already held a stake.
“We see the present setting as a boon to the agritech sector as it will clear up quite a lot of muddle within the house and with out huge progress stress, quite a lot of firms will come out stronger with higher unit economics,” Gramophone’s Khan stated.
“A lot of the firms have already taken the precise steps over the past two quarters and we count on the outcomes to begin exhibiting this 12 months,” he added.
Enterprise mannequin challenges
“Usually, we’ve got gone again to 2019 pre-pandemic ranges for seed rounds, like $2 million to $3 million rounds; there are some exceptions however few,” stated Omnivore managing companion Mark Kahn, when requested concerning the present funding local weather within the sector. For different rounds, pre-money valuations are down 33% from 2021 peaks, he added.
Startups within the house are nonetheless determining preliminary challenges of enterprise fashions, with some having succumbed to an investor-led push on aggressively scaling gross merchandise worth (GMV) with out lively concentrate on gross margin, as per an trade insider.
GMV is the full worth of products offered by an organization, and gross margin is the quantity remaining after subtracting value of products offered from internet gross sales.
“When it comes to enterprise fashions which might be understanding in agri-tech, enter linkages are working very nicely and output linkages are working nicely in non-perishables. In perishables and in branded recent produce, it’s working nicely solely in exports,” stated Kahn. “The entire ‘I purchase vegetable from farmer after which promote it to a kirana’ enterprise mannequin with nothing else is useless.”
Elevating capital has been powerful up to now six-eight months. DeHaat’s $60 million raised in December took lengthy to shut, folks within the know informed ET.
“We will affirm that DeHaat’s present valuation submit the Sequence E funding is between $700 million and $800 million, which is about 80% premium from the earlier funding spherical that happened lower than 13 months in the past,” an organization spokesperson informed ET.
DeHaat is among the many high agri-tech startups in income phrases, alongside Waycool Meals & Merchandise, which claimed to have recorded Rs 1,008 crore of income within the monetary 12 months ended March 2022 (FY22).
Additionally Learn: 2022 12 months in Assessment: Fund-starved startups sacked practically 18,000 staff
Patna and Gurgaon-based DeHaat’s income went up 3.6 occasions to Rs 1,274 crore in FY22, in keeping with the spokesperson.
“We’re on observe to ship greater than 2x of this quantity in FY23 … we’re on an exponential progress trajectory with over 2.5 million farmers and 15,000 DeHaat centres anticipated by FY23 finish, which can be 3x progress from FY22. Being a nicely capitalised organisation, we intention to proceed this progress path in FY24 as nicely,” the spokesperson added.
DeHaat stated it employed 200 folks until final 12 months.
“There was quite a lot of progress in latest occasions which is why firms went forward and employed extra folks … now all of these employed won’t carry out on the identical degree, so that you rent slightly bit further, similar to massive firms do and retain the perfect,” stated Akanksha Malik, founding father of Growth360, which helps startups rent mid-to-senior degree folks.
Omidyar Community India and Sequoia Surge-backed Bijak has additionally been tightening its purses in advertising and folks prices within the latest, a number of sources informed ET.
Three trade insiders confirmed that Bijak laid off many staff. ET couldn’t verify the precise variety of layoffs.
Nonetheless, Kahn from Omnivore, an investor in Bijak, denied these claims and informed ET that Bijak has years of funding runway left and has no motive to chop its workforce.
The corporate operates a B2B agricultural commodities buying and selling market for agriculture suppliers and consumers, a barely extra crowded market inside agritech, competing with the likes of Lightrock India-backed WayCool Meals and Merchandise, Quona Capital backed Arya, Prosus backed Vegrow and Walmart backed Ninjacart.
“There isn’t a dearth of capital to be invested within the sector … however the query is what worth do the buyers need to pay. That’s the place quite a lot of offers are getting caught,” Hemendra Mathur, enterprise companion at Bharat Innovation Fund and a cofounder of ThinkAg, informed ET.
(Graphics and illustrations by Rahul Awasthi)