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Mumbai-based business-to-business (B2B) Bizongo has laid off employees shortly after announcing its $50 million funding round.
While the startup didn't disclose the number of affected employees, A report from the Economic Times stated about 50 employees, which equals 15% of its total workforce have been affected by the layoffs.
Employee reduction follows closely on the heels of a $50M fundraising
Typically, startups and companies implement layoffs when encountering economic challenges or after unsuccessful funding attempts. However, Bizongo's layoffs occurred just after raising $50 million in funding from existing investor Schroder Adveq, a Zurich-based private equity firm.
It's worth mentioning that the startup is on the brink of achieving unicorn status, a milestone every startup aspires to reach. The latest Series E round valued the Mumbai-based startup at $980 million, marking a 63% increase compared to its valuation in the preceding funding round.
Bizongo confirms layoffs
While the development was first reported by ET, A Bizongo's spokesperson confirmed that the company has laid off some of its employees to restructure to improve its performance and sharpen its focus on achieving key business goals.
“We are driving sharper focus towards key business goals and in lieu of this, we have reallocated our people. Parting ways with people is never easy and these are difficult decisions. We are fully committed to extend support to affected employees with the best of our abilities," A company's spokesperson told Entrackr in a statement.
The report further said that the layoffs affected employees across various departments, including sales, marketing, business, and strategy, and spanned multiple hierarchical levels. The affected employees were asked to submit their resignations voluntarily while in the presence of the company’s leadership, the report added.
Bizongo offering vendor digitization platform
Founded in 2015 by IIT graduates Sachin Agrawal, Aniket Deb and Ankit Tomar, Bizongo provides software-based vendor management and supply-chain automation and financing to its customers.
The startup claims that it caters to 450-500 enterprise clients across various sectors like fashion, lifestyle, and pharmaceuticals. The platform plays a pivotal role in managing raw material acquisitions for SME vendors, with over 50% being steel and aluminium, and paper and polymer each holding about a 15% volume share. Bizongo has partnered with over 40 banks and NBFCs to offer unsecured financing to vendors.
How well is Bizongo performing financially?
In FY23, Bizongo posted a gross merchandise value of $800 million and generated a positive cash flow of approximately $7-8 million. According to CEO Agarwal, The startup maintained a steady loss of around Rs 100 crore across FY21, FY22, and FY23. Looking ahead to FY24, Bizongo anticipates a moderate net revenue growth of 25-30% as the company shifts its focus toward profitability.
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