Bengaluru-based retail tech startup Dukaan has laid off at least 57 employees this week, according to sources. The layoffs have affected multiple departments, including sales, business development and operations, two sources aware of the development confirmed to FE.
This is the second round of layoffs at the startup. It had laid off around 23 employees in September last year. At that time, the company said since it was shifting its focus from small kiranas to direct-to-consumer (D2C) brands and small and medium businesses (SMBs), it had to shed a few roles.
Dukaan CEO and co-founder Suumit Shah confirmed the recent layoffs. He said that the startup has shifted its focus to working with large D2C brands and SMBs which are willing to pay for software tools and online storefronts tools, rather than just its earlier focus on small kiranas where monetisation was challenging.
“We are growing our revenues at a healthy pace, ever since we shifted our focus to large brands. We have also been able to move some large brands who earlier worked with apps like Shopify to our own platform. Our latest funding round is almost done, and we plant to use the incoming funds to expand into new geographies within India and in the US as well,” he added.
Dukaan is a mobile-based storefront app that helps SMBs digitise their operations. The app offers features such as online storefronts, payment solutions and inventory management, enabling businesses to manage their operations on the go.
The startup had gained traction in India’s vast and fragmented retail market, where many small business owners still rely on traditional pen-and-paper bookkeeping methods.
Founded in 2020 by Shah, Subhash Choudhary and Kaustub Pandey, Dukaan raised a total of $18.4 million till date. The startup’s investors include prominent names such as Lightspeed India, Matrix Partners, Venture Catalysts and others.
Sources said Dukaan has been trying to secure crucial funding to extend its runway, but has been unable to do so due to a funding slowdown, resulting in the recent layoffs. However, Dukaan’s CEO Shah have denied this adding that the startup has finalised a fresh funding round.
“Despite the layoffs, the startup had been growing its revenue at a healthy rate of 10% month-on-month during the last financial year. They have been able to successfully find monetisation channels with their digital marketing and payment gateway offerings,” one of the sources said.
Currently, Dukaan monetises through multiple offerings such as a premium subscription product, a payment gateway for merchants under the brand Dukaan Pay, and revenue realised from selling digital marketing and ad solutions to merchants that it currently has.
Some of Dukaan’s competitors include Khatabook, OkCredit, PhonePe For Business, Paytm and BharatPe. Some of the most funded players in the segment include Khatabook, which raised $100 million in its Series C funding in August 2021, OkCredit, which raised $67 million in September 2019, and Vyapaar, which raised $30 million in January 2022.
Dukaan’s layoffs come at a time when the Indian tech startup industry has been hit by a prolonged funding correction. In the first two months of 2023, startups including Dunzo, Sharechat, Rebel Foods, Captain Fresh, BharatAgri, Ola, Byju’s, DeHaat, Skit.ai, Coin DCX, LEAD School, Bounce and Cashfree have fired several hundred employees.