Meesho, a Bengaluru-based retail startup, has recently gone through layoffs, firing 150 employees in November 2022. The company has been making headlines lately due to their massive layoffs and the potential impact they may have on the industry. Meesho was founded in 2015 by two IIT Delhi graduates, Vidit Aatrey and Sanjeev Barnwal, and soon caught the attention of prominent investors.
Since its inception, Meesho has been on a rollercoaster ride in terms of funding and investors. The company has raised around $1.1 billion in funding so far, including a Series F funding round in 2021 in which the company raised $300 million. The round was led by Softbank Vision Fund 2 and also included the participation of Facebook, Prosus Ventures, Shunwei Capital, and DST Global.
Meesho is a social commerce platform providing an online marketplace to entrepreneurs, smaller businesses, and individuals to start and manage their businesses. The platform enables them to sell products from their homes and neighbourhoods by sharing catalogs on social media platforms such as WhatsApp. Meesho allows users to earn commission on the sales they generate, which makes it a lucrative option for many people.
As of October 2022, Meesho has reported having over 15 million merchants and a customer base of over 45 million. The company is expanding its reach by setting up operations in Mexico. The platform’s growth has been impressive, but it seems to have hit a roadblock with the recent layoffs.
The layoffs have been attributed to a restructuring exercise that the company is undergoing. Meesho has stated that it is working on optimizing its operations and driving growth in a more efficient manner. The layoffs, however, have raised concerns among employees and industry experts who question the company’s growth and sustainability.
The layoffs also come at a time when the Indian startup ecosystem is going through a phase of consolidation and rationalization. Investors are looking at profitability and sustainability over just growth, which means startups have to focus on optimizing their operations and costs to become sustainable businesses. This is evident in the number of layoffs and downsizing being witnessed across the industry.
Meesho’s layoffs have been met with mixed reactions from stakeholders and the public. The company has stated that it is working closely with the affected employees to ensure a smooth transition and has extended support in the form of outplacement services and extended medical insurance.
The layoffs have also raised questions about Softbank’s investment strategy in Indian startups. Softbank was one of the major investors in Meesho’s recent funding rounds and has a significant stake in the company. The Japanese conglomerate has been criticized for its excessive focus on growth and disregarding profitability, leading to many of its portfolio companies facing challenges.
In conclusion, Meesho’s layoffs are reflective of the broader challenges that the Indian startup ecosystem is facing. While the layoffs may seem like a setback for the company, it is important to understand that they are part of a larger restructuring exercise aimed at optimizing Meesho’s operations. The company’s response to the layoffs and the support extended to affected employees will determine its long-term sustainability. It remains to be seen how the market will react to Meesho’s restructuring and if it will help the company achieve profitability in the long run.