Tiger Global-backed e-commerce platform DealShare is in the process of winding down its business-to-business (B2B) division in response to underwhelming performance, according to sources familiar with the matter. The company has initiated a downsizing of its B2B operations and has recently announced a new round of layoffs.
This cost-cutting initiative comes after DealShare’s strategic consolidation efforts, including exiting certain markets and relocating its headquarters from Bengaluru to Delhi NCR, actions that were expected to result in further layoffs. In January, DealShare had already streamlined its operations and let go of 100 employees.
In a company-wide townhall meeting held this month, DealShare revealed plans to terminate the employment of 120-130 workers, representing just over 10% of its total workforce, which stood at 1,100 employees prior to the announcement. Many of the affected employees are from the B2B segment of the business.
DealShare confirmed these developments to Moneycontrol, stating, “We…took a conscious decision to focus on the B2C business at this point to stay relevant to our consumers in the market. We have taken decisions of realigning our budgets, reorganising teams, and locations, etc.”
While smaller than the B2C unit, the B2B division still contributed approximately 20-25% of DealShare’s revenue. In FY22, the company reported revenue of around Rs 1,930 crore, an eightfold increase year-on-year, but also witnessed its losses expand by 540% to approximately Rs 430 crore.
DealShare has been revamping its offline presence and concentrating its efforts on key markets such as Jaipur, Delhi NCR, Lucknow, and Kolkata while exiting unprofitable regions like Maharashtra.
Founded in 2018, DealShare has faced challenges in finding its product-market fit (PMF). In July, the company’s CEO and co-founder, Vineet Rao, stepped down, making way for a new executive to lead the business. DealShare is undergoing a transformation into a direct-to-consumer (D2C) startup, shifting from its original group buying platform model. The company primarily targets low-income shoppers and offers a range of products, including groceries, general merchandise, and fashion items.
Under its B2B model, DealShare supplied goods to kirana stores, which then sold them to individual customers, leveraging the network of these stores for last-mile deliveries. In the B2B segment, it faced competition from Accel-backed Citymall, Lightspeed-funded Udaan, and others.
DealShare has raised over $390 million in total funding from investors such as Alpha Wave Global, ADIA, WestBridge Capital, Matrix Partners India, and others. In its last funding round in January 2022, the company achieved a valuation of $1.7 billion, according to Tracxn, a private markets data provider.
