After Vedantu, Unacademy and Meesho, now Cars24, the IPO-bound car marketplace, has laid off some 600 employees in recent weeks. The startup has primarily laid off lower-ranking employees in all divisions.
Cars24 lays off 600 employees to cut costs
who requested anonymity confirmed the development and hinted that most of the layoffs occurred because the startup hoped to further automate operations and cut costs. With this dismissal, Cars24 has laid off 6.6% of its total workforce of around 9,000 employees.
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Since September of last year, startup SoftBank has raised $850Mn. The layoffs come nearly five months after it raised $400 million at a $3.3 billion valuation led by Alpha Wave Global. Prior to this round, it had raised $450 million from DST Global, Falcon Edge and SoftBank Vision Fund at a valuation of $1.8 billion.
Cars24 founder Gajendra Jangid said the company is looking to hit $2 billion in revenue by FY23 by betting on its international expansion plans. The company also had plans to expand its diversification beyond the car market into bicycles and grow its used-car financing platform.
“We are making money at the economic unit level, but in general we do not have a positive EBITDA. With an enhanced focus on unit economics and the scale at which we look to expand, not just in India, but internationally (looking at 10% Indian market share this year alone), we look to become profitable before the OPI, Jangid had said.
The startup is looking for an initial public offering in the next 18 to 24 months, thus joining the list of Indian startups hoping to test the public market. Cars24’s Singapore entity became a public company late last year.
Cars24 Services Private Limited, which operates Cars24 in India, has incurred a loss of INR 175.5 Cr on a stand-alone basis in FY21. During the same period, the start-up had generated revenue of INR 175.5 Cr from its sales. 2,731.6 Cr, while its total expenses were pegged at INR 2,946.4 Cr. The startup’s employee benefit expenses, which are mostly made up of employee salaries, PF contributions, and other employee welfare benefits , were INR 196.6 Cr.
The development came in the context of several funded start-ups laying off employees primarily to achieve profitability, mitigate cash shortages, or when they were unable to secure a new round of funding.
Since January, Indian startups have laid off some 3,000 employees (including Cars24). Layoffs in the startup ecosystem this year began with edtech startup Lido laying off some 150 employees, followed by unicorns Unacademy, Vedantu, and Meesho.
So far, Unacademy, led by Gaurav Munjal, has laid off 925 employees in the first five months of 2022. Just yesterday, another edtech giant, Vedantu, said it had laid off around 624 employees, almost 10% of your entire workforce.