According to sources, Drip Capital, a trade financing startup based in California and Mumbai, laid off approximately 20% of its workforce, impacting over 75 employees, in a restructuring exercise in November 2022. The layoffs affected employees across departments, with the tech, engineering, and sales departments facing the biggest cuts. The reasons for the layoffs were not clearly communicated to the employees, leaving them bewildered as the company had reportedly told them in September 2022 that the business was doing well. Drip Capital gave a two-month salary as severance pay to the impacted employees, and full and final payments were cleared within 15 days. The layoffs occurred a year after the company raised $175 million in a funding round in October 2021. Drip Capital offers digitized trade financing solutions to small and medium-sized businesses in India, the US, and Mexico. The company is reportedly hiring for multiple positions now, months after the layoffs.
Drip Capital had raised $175 million in a funding round in October 2021, which included a $40 million Series C investment and $135 million in warehouse debt facilities. The startup’s investors include TI Platform, Accel, Sequoia, Wing VC, and Irongrey, among others. Despite the funding, the company still underwent a restructuring exercise resulting in layoffs. The layoffs at Drip Capital are part of a larger trend in the Indian startup ecosystem, where many companies, including unicorns like OYO, BYJU’S, and Dunzo, have laid off employees over the past year or so in an attempt to cut costs and extend their runway amid a funding winter. The COVID-19 pandemic has also had an impact on the Indian economy, with many businesses struggling to stay afloat. However, some startups have been able to weather the storm and continue to grow, while others have had to restructure and cut costs to stay afloat.