Major Workforce Layoff
ReshaMandi, a Bengaluru-based B2B marketplace specializing in silk yarn products, has laid off 80% of its workforce due to its failure to secure Series B funding. The company has downsized significantly, reducing its employee count from 500 to around 100.
In this downsizing process, approximately 300 employees are still awaiting their final dues and salaries. According to a report from Inc42, the company’s rapid expansion across various verticals immediately before and after its funding round in October 2021 significantly contributed to its downfall.
Pending Dues for Employees
The report suggests that ReshaMandi’s “growth-at-all-costs” strategy led to inflated revenue figures in FY23 and FY22. It appears that Temasek and other investors became aware of these issues through social media and employee discussions.In the process, approximately 300 employees are still awaiting their final dues and salaries. According to a report in Inc42, employees have cited the company’s rapid expansion across verticals, both immediately before and after raising funds in October 2021, as a key factor in its downfall.
Growth-at-All-Costs Mindset
The report suggests that ReshaMandi’s “growth-at-all-costs” mindset led to inflated revenues in FY23 and FY22. It is believed that Temasek and other investors became aware of these issues through social media and employee conversations.
Financial Challenges and Legal Issues
Founded in 2020, ReshaMandi raised over $40 million in equity funding from investors such as Creation Investments, Omnivore, and Venture Catalysts. The company also secured nearly Rs 300 crore (approximately $25 million) in debt from venture debt investors and lenders. However, it now faces court cases from creditors and vendors, with some planning to file for insolvency.
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