Spinny, the Tiger Global, ADQ backed used cars platform, is laying off 300 employees, as India’s unicorns feel the heat of profitability and worsening venture capital investment scenario. Spinny co-founder and CEO Niraj Singh announced the layoffs in a townhall meeting on Wednesday, reports Business Today. One among the laid-off employees wrote on LinkedIn about the layoffs.
The layoff, adds to a string of similar layoffs announced by a large spectrum of Indian unicorn startups. A large number of such high-valued companies raised private investments in the 2021-22 funding spree, commanding lofty valuations and paying exorbitantly high salaries to attract technology talent. Business models weren’t the top priority during those fundraises, resulting in these companies feeling the heat now, and laying off employees to increase runways.
Spinny has about 6000 employees, with this layoff affecting nearly 5% of its overall workforce. The company, in a statement, said, “We are merging our Budget and Luxury offering platforms – Truebil (Truebil.com) and Spinny Max (Spinny.com/max) – with our master brand Spinny (Spinny.com). This will allow us to offer customers a wider assortment of cars across price points and simplify the discovery of the right car for their needs.”
Spinny’s rationale is to merge all brands under a single entity, as the company claims to have seen a “sharp uptick in demand for reliable, budget friendly cars”, since most people have resumed work from the office. However, most industry trends have pointed to a tapering growth in the segment, and even de-growth in specific segments as global macro-economic headwinds and rising inflation have delayed luxury purchases for most consumers. Mass Layoffs across the tech sector haven’t helped either.
“This business reorganisation will strengthen our go-to-market business model, reduce costs and improve our margin profile, putting us on an expedited path to profitability. However, it will impact approximately 4.5% of our total workforce as we consolidate our operations under a single brand”, Spinny further added.
Spinny raised a staggering $283Mn in December 2021, from marquee names such as Tiger Global, Abu Dhabi’s ADQ among others. That funding spree led to Spinny opening several swanky physical outlets, akin to new car dealerships opened by automotive companies. However, the economics of such a heavy capex model have not really worked out for Spinny, with the company incurring a 490 crore loss in FY-22.