VerSe Innovation, which owns and operates content and news app platform Dailyhunt, on Monday laid off around 150 employees or about 5% of its workforce citing changes in economic conditions. Dailyhunt also implemented an 11% salary cut for all individuals with salaries above Rs 10 lakh per annum.
Umang Bedi, co-founder, VerSe Innovation, said the company is evaluating its strategic priorities in the economic climate. “Considering the long-term viability of the business and our people, we have taken steps to implement our regular bi-annual performance management cycle & made performance & business considerations to streamline our costs and our teams. This has impacted 5% of our 3,000-strong workforce,” Bedi added .
The layoffs come around seven months after Dailyhunt secured one of the largest funding rounds in the consumer Internet segment, especially when equity funding in the startup ecosystem has dried up. In April 2022, Dailyhunt raised $805 million in fundraising at a valuation of $5 billion. This was the largest funding round closed by any tech startup this year, overtaking edtech decadron Byju’s $800 million fundraise announced in January.
At that time, Dailyhunt’s co-founder and Virendra Gupta told FE a chunk of this capital would also be deployed in mergers and acquisitions in the next few quarters. He also said the firm will work on creating an IPO-ready business within the next two to three years with a focus on breaching the Ebitda profitability metric within the same timeline.
Dailyhunt and Josh, saw losses skyrocket to Rs 2,563 crore in FY22 from Rs 808 crore in FY21 on the back of promotional costs and employee benefit expenses, the regulatory filings showed.
VerSe Innovation’s operating revenue, however, jumped 45% to Rs 965 crore from Rs 666 crore in FY21. The group saw most of its revenue come from ads it ran on the app & website and from the subscription its customers bought.
The Google-backed company turned a unicorn when it raised $227 million from Microsoft, Sequoia, Matrix Partners India, Qatar Investment Authority and others during the pandemic November 2020. With people restricted indoors because of the lockdown, the consumption of short videos and other forms of entertainment increased. The company has so far raised over $1.8 billion and is valued at about $4.21 billion. It competes with ShareChat’s Moj, Instagram’s reels, MX TakaTak and YouTube Shorts, among others.
So far in 2022, new-age startups in India have axed close to 16,000 people, with number predicted to increase by year-end. While companies across sectors have cut jobs, edtech firms have been particularly hit as demand for online education wanes.