Info Edge Ventures-backed startup 1K Kirana has laid off nearly 40 percent of their employees as they restructure their business and wind down in some geographies. According to sources, the number is likely to be even higher- potentially over 60 percent of their workforce or around 600 employees. The layoffs affected their on-ground operations, warehouse, delivery, network operations, growth, and tech teams.
It is understood that the startup was struggling to raise the much-needed fresh capital due to investor’s focus on profitability and fiscal metrics, which may have led to this development. The employees were informed about their layoffs in November, with the latest round being held by the end of March. The company is reportedly offering only one month’s salary in severance pay as compensation.
1K Kirana Bazaar is a tech startup, founded by Kumar Sangeetesh and Sachin Sharma in 2018. It focuses on tying up with local Kirana stores, organizing them, and offering their services to customers. However, their business model proved to begamble, due to significant overhead costs, such as rent and electricity payments.
Kumar Sangeetesh, who is the co-founder of 1K Kirana, confirmed the news in a statement to Moneycontrol’s queries. He said, “We are currently in the process of restructuring as our growth forecasts have changed. We are changing our focus areas and moving out of a few geographies. Due to this, we have to let go of 40 percent of our employees.”
Following their last funding round of $25 million in May 2022, led by Alpha Wave Global, Info Edge Ventures and Kae Capital. It is also backed by other prominent unicorn founders and angel investors.
1K Kirana operates more than 1,000 stores across Rajasthan, Punjab, Uttar Pradesh, Uttarakhand, Gurugram and Delhi, assisting around 1,000 kirana merchants while cutting off middlemen. However, last week teams of the remaining tech workers were asked to take a 40 percent pay cut, which resulted in the staff going on a one-day strike. In response to these events, Sangeetesh stated “Company followed the standard operating procedure. HR was involved and they helped the managers to communicate. Severance package and the full and final settlement are subject to company policies.”