Khatabook, the fintech startup backed by Peak XV Partners, has taken steps to reduce costs and move towards profitability. These measures include layoffs that have affected more than 40 employees.
Notification to Impacted Employees
The affected employees received news of the layoffs during a town hall meeting conducted earlier this week. As part of the company’s response, Khatabook has extended a severance package, equivalent to three months of salary, to those affected.
Departments Affected by Layoffs
Sources cited by Entrackr, the first to report on this development, indicate that the affected employees came from various departments within the company, including sales, marketing, analytics, and tech teams.
Khatabook’s Official Statement
A spokesperson from Khatabook confirmed the layoffs while speaking to Inc42. The spokesperson explained, “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. All impacted employees have been provided with a separation package which covers 3 months of pay, stock option vesting & health insurance extension and other job search-related support.”
Khatabook’s Background and Financial Snapshot
Khatabook, initially founded by Vaibhav Kalpe and later acquired by Kyte Technologies in 2018, operates as a bookkeeping platform, assisting kirana store owners in managing their accounts through digital ledgers. The startup chose to discontinue its ecommerce enablement product, MyStore, in November 2021, to concentrate on its core bookkeeping and lending operations.
Khatabook has secured a total of $187 million in funding, with a substantial $100 million coming from Tribe Capital and Moore Strategic Ventures in its Series C funding round. Notable investors in Khatabook include B Capital, Peak XV Partners, and Better Capital.
While the startup’s revenue from operations showed significant growth, increasing to INR 71.1 crore from INR 16.9 crore in FY21, its net loss widened considerably, reaching INR 111.1 crore in FY22 compared to INR 32.5 crore in the preceding year. Additionally, total expenses surged by 74% to INR 189.3 crore in FY22, up from INR 108.6 crore in FY21.
Khatabook presently offers business management applications tailored for MSMEs in multiple languages and boasts over 50 million app downloads. In a competitive landscape, it faces rivals such as OkCredit, Pagarbook, and Paytm’s Business Khata.
