Fintech startup Simpl cuts 50 jobs in second layoff round
Buy Now Pay Later (BNPL) startup Simpl has announced a second round of layoffs, affecting approximately 50 employees across various departments. This decision comes less than a month after the Bengaluru-based fintech firm laid off about 160 employees, primarily in high-paying roles such as engineering and product. The layoffs are attributed to the company's increased monthly cash burn and slowing new user acquisitions.
Simpl's cost-cutting measures aimed at profitability
The decision to lay off employees was communicated by the founder to department heads earlier today. Some senior management members were not directly laid off, but asked to resign instead. These layoffs are part of Simpl's cost-cutting measures, which are aimed at achieving profitability. This is technically their third round of layoffs, following a group of employees let go in March and April after performance reviews, and over 160 employees in May.
Simpl's financial performance and business expansion
In FY23, Simpl's net loss increased by 147% to ₹356.6 crore, despite a surge in operating revenue by 176% to ₹87.3 crore. A mid-senior executive revealed that the company had over-hired post-pandemic to expand their checkout network business into the D2C segment. However, this business expansion has been stagnant since last year, contributing to the company's financial strain.
Regulatory pressure on India's BNPL startups
These layoffs come as India's Buy Now Pay Later (BNPL) credit startups face increased scrutiny from the Reserve Bank of India. In a similar vein, BNPL startup ZestMoney shut down its operations in December 2023 due to regulatory uncertainty and a failed attempt to revive its business under new management. The firm had also let go of around 150employees.
Simpl's business model and funding history
Founded in 2016, Simpl operates with around 26,000 merchants on its platform including Zomato, Makemytrip, Big Basket, 1mg, and Crocs. The company approaches BNPL as one of the checkout options to give its partner merchants the option to extend a pay later mode to customers. In 2021, Simpl announced a $40 million Series B fundraise led by Valar Ventures & IA Ventures.
