Chennai-based agritech startup WayCool laysoff over 200 employees

Chennai-based agriculture supply chain startup WayCool Foods has laid off over 200 employees in its third round of layoffs within the past year. 

According to a Moneycontrol report, the move affects employees across various departments and locations, including Chennai, Bengaluru, and Hyderabad, as well as subsidiaries CensaNext and BrandNext. 

The layoffs are part of the company's efforts to streamline operations and cut down losses amid ongoing financial challenges.

Financial struggles and delayed payments

The report said WayCool Foods is facing financial difficulties, including delayed salaries and client payments.

"Salaries have been delayed in the past, and the company is yet to process the June payslip. Funding has dried up, and the payments from clients are stuck," the report said, citing the source.

The company's financial issues have also led to unpaid dues to vendors, such as millers, logistics partners, and service providers.

Focusing on profitability

After raising nearly $400 million in funding, WayCool is now focusing on achieving profitability.

"Each of WayCool's businesses is executing their plans to get to profitability. As part of this, roles and structures are further simplified and automated. This will be a continual process," the company's spokesperson said while acknowledging the layoffs without disclosing further details, such as the number of affected employees.

Funding and investors

WayCool Foods has already been facing a funding crunch. Last year, the startup was negotiating a fresh funding round of over $50 million, which could have increased its valuation to about $900 million.

However, these talks did not go through, leaving the company's valuation at $700 million from its last equity round.

The startup said that it has secured 75% of the capital from its ongoing bridge round of $40 million and will complete the fundraising by August this year, which it believes will provide a sufficient runway to reach cash profitability.

WayCool Foods' financial performance

While the company is yet to release its financial statements for FY24, WayCool reported a 62% increase in operating revenues to Rs 1,251 crore in FY23 from Rs 772 crore in FY22. 

However, according to data from The Kredible, its losses surged by 89% to Rs 685 crore during the same period. 

The company's expenses, including procurement of materials, employee benefits, advertising, and transportation, increased by 71.3% to Rs 1,951 crore in FY23.

WayCool, founded by Sanjay Dasari and Karthik Jayaraman, started in 2015 as a supply chain business for agricultural products and later ventured into the consumer packaged goods space. 

The startup later hived off its FMCG business into a new entity, 'BrandsNext', which now houses about seven brands, including L’exotique, Dezi Fresh, AllFresh, and Just Potate.