Fraazo is a Mumbai-based food delivery startup that was founded in 2016. The company operates through a network of “dark stores,” small facilities that function as mini warehouses, and enable Fraazo to deliver food quickly and efficiently. With a focus on offering healthy and tasty food options, the startup has become a popular choice among the urban population in Mumbai.
History and Funding:
Fraazo started as a small food delivery platform catering to customers in select neighborhoods in Mumbai. However, in a short span of time, the startup expanded its presence to other parts of the city by opening additional “dark stores.” In 2018, the company raised its first round of funding of $7 million from a group of investors led by Sequoia Capital India. This was followed by a Series A funding of $35 million in 2019, led by Norwest Venture Partners and Battery Ventures. In 2021, the company raised $63 million in Series B funding from a group of investors, including GGV Capital and Tencent.
Over the years, Fraazo has built a loyal customer base through its focus on quality food and speedy delivery. The company’s sales have grown steadily, with a reported revenue of over $100 million in 2021. The startup’s success has attracted a lot of attention and has made it a prominent player in the food delivery segment in Mumbai..
Reason for Layoffs:
However, despite its success, Fraazo recently announced that it is laying off 150 employees and closing down 50 of its dark stores. The announcement came as a shock to many, especially after the company had just secured a hefty amount of funding in its Series B round. According to reports, Fraazo has been hit hard by the pandemic, which has led to a significant decline in sales. With the restrictions on movement and people staying indoors, the demand for food delivery services has decreased, and the company has been struggling to stay afloat.
The layoffs have affected almost 25% of Fraazo’s workforce. This has resulted in a lot of concern among the company’s employees, many of whom have been with the startup since its inception. The laid-off employees were offered a severance package, which the company claims is “generous” and includes two months of salary as well as health benefits for six months. The remaining employees have been assured job security and have been encouraged to put in their best efforts towards helping the company recover from the setback.
In a statement to the press, Fraazo’s CEO, Mr. Ravi Menon, said, “The decision to lay off employees was not an easy one, but we had to take this step to protect the interests of the remaining employees and our investors. We are confident that with the reduction in workforce and the consolidation of our dark stores, we will be able to weather this storm and emerge stronger.” The company’s investors have also expressed confidence in the startup’s long-term potential. Mr. Prashanth Prakash, partner at Accel, one of Fraazo’s early investors, said, “We believe in Fraazo’s vision and their ability to execute it. The current situation is challenging, but we are confident that the company has the resilience to bounce back”.
In conclusion, Fraazo’s recent layoffs have come as a setback for the startup and its employees. However, the company’s management and investors are optimistic and believe that the consolidation of its operations and the commitment of its remaining employees will help Fraazo recover from the pandemic-induced slowdown. As one of the leading players in the food delivery segment in Mumbai, Fraazo’s fate will be closely watched by the industry and investors alike.