Bookkeeping app and lending platform Khatabook has joined the league of various growth-stage companies which reduced workforce to cut costs and extend the runway. The company has laid off over 40 employees across departments, according to three sources aware of the exercise.
“Khatabook has laid off 42 employees across sales, marketing and analytics, and technology verticals,” said one of the sources requesting anonymity. “People who lost their jobs in the exercise have been given standard severance packages including 3 months salary among others.”
Sources indicate that the company has communicated to employees about their job loss in a town hall meeting early this week.
Khatabook has confirmed the development to Entrackr stating that it was a part of restructuring. “In line with our profitability goals, we are reorienting some parts of our business which requires us to operate with a leaner team on certain business lines. This restructuring has impacted 6% of our 700 employees,” said a company spokesperson in a statement.
Khatabook has raised $187 million to date including its Series C round of $100 million majorly from Tribe Capital and Moore Strategic. It also counts B Capital, PeakXV, and Better Capital as its backers.
To focus on its core biz bookkeeping and lending, Khatabook had shut down its e-commerce enablement product MyStore in November 2021.
The company was in pre revenue stage until FY20 but managed to earn Rs 17 crore in revenue during FY21 which further surged to Rs 71 crore in FY22. The firm is yet to file its financials for the previous fiscal year. In October 2022, the company’s co-founder and CEO Ravish Naresh said that it is aiming to clock a loan book size of Rs 1,000 crore by October 2023. As per him, the company would turn profitable in mid-2024.
Khatabook’s core competitor OKCredit has not been doing well and currently operates with a lean team and minimal burn. The Lightspeed-backed company raised close to $90 million but didn’t manage to scale and raise follow-on capital. It raised $67 million in a Series B round exactly four years ago. In February last year, OkCredit also fired 35% of its employees. Entrackr exclusively reported the development.
