Bengaluru-based fintech startup Jodo laid off around 100 employees last week in a cost-cutting exercise on the back of a lower-than-expected business growth, multiple sources told Inc42.
The Tiger Global-backed educational fees management startup held a virtual town hall meeting on November 17 during which its founders informed the employees that Jodo would need to cut down its costs to sustain over the coming months. The founders also said that the startup failed to achieve the business targets for this year, the sources said.
An email sent to the founders of Jodo regarding the layoffs didn’t elicit any response till the time of publishing this story. The article will be updated on receiving a response from the startup.
According to the sources, the founders said during the town hall meeting that the employees who would be impacted by the layoff exercise would receive emails about it. Following the meeting, the employees received the emails and their permissions to access the startup’s email, Slack, among others, were withdrawn within an hour.
The layoffs took place across departments, including engineering, data, customer success, product management, sales. New employees as well as those drawing high salaries were impacted by the retrenchment exercise.
Inc42 has learnt that Jodo is offering a severance pay of 45 days and outplacement support to the impacted employees.
“The startup last year processed fees worth INR 900 Cr and had set an impossible target of INR 9,000 Cr this year. However, Jodo will be ending this calendar year with INR 3,000 Cr worth of fees processed,” one of the sources said.
Multiple other sources also confirmed the steep business target set by the startup.
Founded in 2020 by Atulya Bhat, Raghav Nagarajan and Koustav Dey, Jodo provides a fee management system for educational institutions. It partners with educational institutions and NBFCs to offer flexible fee payment plans, including no-cost instalment plans, to students and parents.
As per its website, the startup has partnered with educational institutions like Presidency University, LPU, and DPS. Overall, it claims to have partnered over 3,000 educational institutes.
One of the sources said that there has been a gradual shift in customer behaviour post-Covid, which has impacted Jodo’s business. While educational institutions relied heavily on offerings of Jodo during the pandemic, the same is not the case now. Many educational institutes have also moved to different lending tech platforms which charge lower interest than Jodo, the source added.
“One has to understand this is a seasonal business. The business picks up in April, when there’s a new start to the academic season,” another source added.
The latest development came more than a year after the startup raised $15 Mn in its Series A funding round led by Tiger Global at a valuation of $90 Mn. Jodo also counts Elevation Capital and Matrix Partners among its backers.
The startup posted a net loss of INR 8.6 Cr in the financial year 2021-22 (FY22) on an operating revenue of INR 1.67 Cr.
It must be noted that all the founders of Jodo worked with Matrix Partners earlier.
With the layoffs, Jodo has joined the long list of Indian startups which have fired employees since last year following the onset of the funding winter. According to Inc42’s layoff tracker, Indian startups have laid off nearly 29,000 employees so far since 2022.
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