Ahmedabad-based fintech startup Lendingkart recently laid off 30% of its workforce just days after securing a ₹319Cr funding. The move is expected to impact around 200 employees of the company.
Lendingkart provides collateral-free working capital loans ranging from Rs 1 lakh to Rs 40 lakh to small businesses and MSMEs, who have taken a big hit during the current uncertain time. Digital lending startups have reported a sharp decline in business due to the COVID-19 lockdown.
The company in an internal email to its employees said, “The ongoing period has had a debilitating effect on micro, small, and medium enterprises, where everything has come to a virtual standstill. NBFCs have been significantly impacted, with loan disbursements coming to a halt and moratorium impacting collections.”
The company claims that these layoffs are also a part of its annual appraisal process. The company said that it usually downsizes its team by 15-20% after a performance review. However, this year additional right sizing has been undertaken by the company.
According to an ET report, in addition to the layoffs, the management and leadership team has also taken pay cuts as the company is in dire need to conserve capital.
Recently, Lendingkart had secured ₹319 crore as a part of its ongoing Series D round led by existing investors- Fullerton Financial Holdings and Bertelsmann India Investments, among others. Post allotment, the company’s estimated market capitalized valuation has reached to around ₹1860 crore ($248 million).
Assuring the impacted employees of support, Lendingkart has said that the estranged employees will be on the company payrolls for the next 3-5 months, serving their notice, with insurance and medical insurance being provided to them for this period.
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