ETtechAt least 50 top executives – ranging from C-suite to category and business heads – left Udaan in 2022, as the company grappled with funding and business model issues, even as two of its founders moved away from active roles over the course of the year.
To streamline its business,
Udaan has executed multiple rounds of layoffs through the year, with an estimated 1,000 employees having exited the firm, ET reported on November 4.
Udaan has been cutting costs across verticals to improve its unit economics, especially in the food and fast-moving consumer goods categories.
Before that, profitability was put on the backburner when Udaan was growing at break-neck speed in 2019, as the company’s strategy was to grow at all costs, according to multiple employees who worked with the company at the time.
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Though executives like chief marketing officer Suvid Bajaj and chief financial officer of Udaan Capital Tanushree Bagrodia left, Udaan told ET that it had not logged any C-suite level exits as the company defines such executives as those who directly report to its CEO Vaibhav Gupta.
Gupta was appointed chief executive in September 2021.
The company, backed by Lightspeed Venture Partners, has been picking up funds through convertible notes, a form of debt that gives investors an option to convert their stake to equity in future.
ET was the first to report that in October
Udaan had raised $120 million through convertible notes from existing investors. It has so far picked up close to $400 million in convertible notes and debt from investors this year.
The Bengaluru-based startup was founded by three early Flipkart executives Sujeet Kumar, Amod Malviya and Gupta in 2016.
Both Kumar and Malviya have stepped down from their operating roles as the company struggles to survive in a highly competitive B2B commerce sector which has players like Reliance’s JioMart Retail and SoftBank-backed ElasticRun, among others.
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Ola’s revolving door
Meanwhile, Ola saw 21 exits of key executives in a tumultuous year for the company, which shut down multiple businesses like grocery, food and used cars, as attempts to build a super app failed.
The company has let go of around 1,000 employees, ET reported on July 29, as it focused on the core ride-hailing business and scaled up manufacturing of electric vehicles (EV).
In the EV business, Ola Electric witnessed its toughest challenge when one of its scooters caught fire during the summer. Soon, other EV firms also witnessed similar incidents. Its sales plummeted following the incident but has recovered strongly of late. Ola Electric has topped the sales charts every month since September this year.
In a recent media briefing, founder Bhavish Aggarwal said the company will also manufacture electric commercial vehicles even as it doubles down on its two-wheeler segment, while it has plans to launch a car by 2024.
It is also looking to manufacture its own battery cells by the end of next year.
People close to the company’s hiring plans had told ET that the layoffs were more of a “repurposing process” than a “cost-cutting” exercise.
Ola declined to respond to ET’s queries.
“There is a lot of attrition in Ola. That is one company where you’ll always see a high churn,” said Anshuman Das, managing partner at Longhouse Consulting. “The average life of a top executive at a startup is about three years, and at Ola, it is almost 13-14 months. So, it is really on the very poor side. Companies like Flipkart have an average stay of about three-four years for top executives.”
Oyo’s stalled IPO plans
Oyo Hotels & Homes also saw the exits of 21 key executives and its much-talked-about IPO plans have yet to materialise amid a tough year for tech stocks as global companies lost billions of dollars in market capitalisation last year.
“This year, the number of mid to senior-level executives moving on was a tad higher than normal, equally due to the reorganization we have undertaken to make the company leaner and harness efficiencies from our past acquisitions,” a company spokesperson said.
The SoftBank-backed startup saw Rohit Kapoor – who was its CEO for India and Southeast Asia business till April this year – leave to join Swiggy as CEO for its food delivery business.
Kapoor was made global CMO at the hospitality firm in April and he left the company after five months in that role.
ET has reported previously that
SoftBank had to internally trim the Ritesh Agarwal-led firm’s valuation to $2.7 billion at a time when Oyo had filed new documents with the market regulator for its proposed initial public offering. The company had denied any such markdown in its valuation in September.
Oyo had said business was recovering as its audited results showed a Rs 7 crore maiden adjusted Ebitda profit in the June quarter, at a 41% gross profit margin and a 45% increase in gross booking value per hotel per month, compared to the previous financial year.
