Feedback sought from experts, start-ups asked to provide balance sheets for three years.
The growing number of lay-offs by several start-ups over the last three months appears to have dented their credibility this placement season. For the first time, IIT Bombay’s placement cell is vetting the credentials of start-ups before offering them slots, including asking for balance sheets and checking feedback.
“Not only were the annual balance sheets of the past three years reviewed but feedback from industry experts, entrepreneurs and alumni, too, was taken before giving the start-ups slots for placement sessions,” said a source in IIT B’s placement cell. The institute kicked off its 20-day placement process on Tuesday.
While start-ups had claimed “opening slots” in the last couple of years due to their popularity among students, most of them have been pushed this time to slots on the fifth or even the eighth day.
When contacted, Atul Shukla, placement manager, IIT B placement cell, told The Indian Express: “It is not that we have slotted all the start-ups for later slots. This year, we have been considering the credibility of start-ups and scrutinising (them) before slotting due to many factors, including the recent lay-offs.”
However, the offer of late slots has prompted some start-ups to stay away from the placement process at the institute.
For instance, Taskbob, a Mumbai-based mobile-only on-demand home services start-up, which was incubated in IIT B in 2014, opted out this year. “We got a slot on day eight, which we were not happy with and we withdrew from the process,” said Aseem Khare, CEO and founder of Taskbob.
According to the IIT B source, “some of the start-ups have cited business reasons for the withdrawal, while some have informed that they are not participating due to non-availability of desired slots”.
In the last three months, over half a dozen start-ups, including Housing.com, TinyOwl, Zomato, Dazo, HelpChat and LocalBanya, have collectively laid off over 1,700 employees because of shrinking funds or changed strategies.
In August, it was reported that realty portal Housing.com has decided to fire at least 600 employees as a part of a restructuring strategy. Zomato, a restaurant discovery portal that has been valued at over $1 billion, too, decided to layoff at least 10 per cent of its total staff strength. More recently, another restaurant search app Tinyowl fired over 100 people and shut down some of its offices as part of a restructuring exercise.
According to experts, these layoffs could have been “handled… a lot better” by the start-ups.
“Their credibility has definitely taken a hit and I think that’s because they (the layoffs) were managed quite poorly. Joining start-ups comes with a higher risk and reward attached to it. Most people are aware of this and therefore I don’t think the start-ups should be the ones taking all the blame. But they could have handled it a lot better,” said Payal Goel, Vice President – Investments at venture capital firm Aspada Investment Advisors.
One of the students taking part in the placement process at IIT B said he would not consider an offer from a start-up. “I would prefer to wait for a credible or known name, rather than accepting an offer from a start-up. With the current scenario and going by the mass firings, I don’t see a better future with start-ups,” said the student, who did not wish to be named.
“Even the institute has scheduled start-ups for later slots. It is evident that the placement cell is trying to safeguard students. So why would we look at joining start-ups?” said another student.