Chingari, which fired 20% of its workforce earlier this year, sacked employees from teams like product, customer support, design and marketing in the latest round of layoffs
Amid a severe cash crunch, Chingari also asked some of its employees to take pay cuts of up to 50% to cut its expenses, sources told Inc42
The startup has been looking to raise fresh funds but the fundraise has been stuck in due diligence procedure for a long time, as per the sources
Bengaluru-based short-video platform Chingari has laid off more than 50% of its workforce in the second round of layoffs within two months amid a cash crunch, sources told Inc42.
The layoffs, which took place last week, impacted employees from teams like product, customer support, design and marketing, the sources added.
The impacted employees were informed about the retrenchments during a one-on-one interaction with the members from the HR team or respective team managers. During the meetings, the employees were asked to tender their resignations, the sources said.
A detailed questionnaire sent to Chingari on the latest development didn’t elicit any response till the time of publishing this story. The article will be updated on receiving comments from the startup.
Commenting on the layoffs, one of the sources said, “This came out of nowhere. After the first round of layoffs, the higher management told the employees time and again that the company has enough cash runway.”
Multiple other sources echoed the same sentiment.
Earlier in June, Inc42 exclusively reported about Chingari laying off 20% of its workforce.
Chingari now has only 50-60 employees following the latest round of layoffs, as per the sources.
Besides layoffs, Chingari has also asked some of its employees to take pay cuts of up to 50% to bring down its expenses, the sources added. They cited a severe cash crunch as the reason behind the startup undertaking these measures.
“They (Chingari) were waiting to receive fresh funding from investors but it has been stuck in the due diligence procedure for a long time,” a source said, adding that the startup would have no option but to shut operations if it fails to get fresh funding in the next few months.
Chingari last raised an undisclosed amount of funding from Aptos Labs in February this year. The startup then said it would use the fresh funds for user growth, product development, global expansion, and to ramp up its engineering team.
While announcing the fundraise, the startup also said it planned to launch an upgraded app on the Aptos Network by the second quarter of 2023.
Chingari’s Struggles
Chingari, like other short-video platforms, rose to prominence after the Indian government banned Tiktok, along with other Chinese apps, in 2020 citing security concerns.
Cashing in on its newly-found fame, Chingari raised capital across multiple rounds. Till date, the startup has raised $47 Mn from investors such as OnMobile, Republic Capital, JPIN Venture Catalysts, Hill Harbour, Galaxy Digital, and Alameda.
While Chingari started as a short-video platform, it also entered the crypto space with the GARI token, which it hoped would drive engagement and new downloads. However, the value of the token has been on a free fall since last year.
Besides, the company has also been hit hard by the falling number of app downloads. Data sourced from Apptopia showed that Chingari’s download numbers hit a rock bottom around May-June 2022, after touching a peak of around 500K daily downloads in January 2022. The number of downloads have failed to recover since then.
In order to improve engagement on the platform and increase the number of app downloads, Chingari also forayed into 18+ content with paid live one-on-one calls between creators and users.
In terms of financial performance, the startup reported a net loss of INR 139.4 Cr in FY22, a jump of 225.7% from INR 42.8 Cr in FY21. Meanwhile, total income rose 137X to INR 49.4 Cr from INR 36 Lakh in FY21.
It must be also noted that amid the layoffs, Chingari acquired a chess team, Chingari Gulf Titans, in the Global Chess League. Recently, the startup also became a digital partner of UK-based football club, Southall Football Club.
Chingari, founded in 2018 by Sumit Ghosh, Aditya Kothari, Biswatma Nayak, Deepak Salvi, also saw one of its cofounders Kothari exit the startup in May this year.
The layoffs at Chingari come amid the ongoing funding winter, which has forced multiple other social media and crypto-focused startups like Sharechat, Koo, and CoinDCX to layoff employees.
As per Inc42’s layoff tracker, Indian startups have laid off over 28,000 employees since last year.
