Sequoia Capital-backed Nearbuy, formerly known as Groupon India, is currently going through a series of tough bouts. Due to rough business conditions and a scanty bank balance, the co-founders have already raced towards the exit door and now the company is cutting down on its workforce. It has decided to let-go of about 10 per cent of its staff personnel.
The news of the lay-offs, first reported by ETTech, comes at the heels of the news of the exit of the co-founders, Sachin Kapur and Ankur Sarawagi, from the company. The two who’d jumped the daily deals and coupons bandwagon after its initial traction among consumers, are now likely to settle back and move on to a consulting role for the time being. It has also seen a bunch of other senior-level executives exit the firm due to rapid decline in coupon business.
Commenting on the sacking of a chunk of its employees, Ankur Warikoo, CEO of Gurgaon-based company says,
Headcount has been reduced from 431 to 383. All except 17 departures were on the basis of the annual appraisal results that we conduct every year in February and March.
The 17 departures were because we reconsidered entering into food delivery and closed down our products business, a legacy from Groupon – admittedly we went into a cash conservation mode because of the changed funding environment. No raises were given and spending on non-people elements was controlled.
If you’re unfamiliar with the situation of Nearbuy, which is at the brink of extinction, let me brief you about the same. Nearbuy, formerly known as Groupon India, was previously a subsidiary of the Chicago-based coupon and deals entity Groupon. Sequoia Capital pumped in a fresh $100 million into the Indian arm last year, to help it break away from the parent. The investment firm now holds a large stake in the company alongwith Groupon who still holds a majority stake.
But, there has been overall slowdown in the market and the coupon industry in India has stagnated. And companies like Nearbuy are now finding it difficlut to rope in big brands and convince them to provide offers on its platform. It has reportedly also picked up a debt of $2 -$3 million(or Rs. 15-20 crore) from Blacksoil Capital.
Commenting on his exit from the company, co-founder Sachin Kapur said,
Yes, I am taking a break. I have some personal projects in mind that I have been trying to work on but I will still be involved with Nearbuy. Post the re-branding to Nearbuy we have pivoted (change of business model) to being a largely local commerce player. There has been an overall slowdown in the market and we are not insulated from that.
To sustain operations and cut costs around the world, its ex-parent Groupon had resorted to a massive workforce reduction last year. It has shutdown its operations in Morocco, Panama, The Philippines, Puerto Rico, Taiwan, Thailand and Uruguay among others, signalling at massive decline of the coupons business.