Khatabook, the fintech startup valued at a substantial US$600 million, has recently undergone significant restructuring efforts, resulting in the termination of 42 employees, which accounts for approximately 6 percent of its total workforce. The company’s decision to reduce its workforce is part of operational strategies with its overarching profitability targets.
Before the staff reductions, Khatabook boasted a total workforce of 700 employees. A spokesperson from the company explained the reasoning behind these layoffs, stating, “In-line with our profitability goals, we are reorienting some parts of our business which requires us to operate with a leaner team on certain business verticals.”
Recognizing the potential impact on affected employees, Khatabook is actively working to provide support during this transitional phase. The spokesperson emphasized, “This restructuring has impacted 6 percent of our 700 employees. All impacted employees have been provided with a separation package which covers 3 months of pay, stock vesting option, health insurance extension and other job search-related support.”
Khatabook, a prominent player in the fintech industry, has garnered substantial attention and investment. It counts Sequoia Capital (now PeakXV Partners), Tencent, Tribe Capital, and Moore Strategic Ventures, among others, as backers. The company has successfully raised a total of $187 million in funding to date, with its Series C round alone securing $100 million from Tribe Capital and Moore Strategic Ventures. Investors such as B Capital, Peak XV Partners, and Better Capital have also expressed their confidence in Khatabook’s vision and growth potential.
The startup’s net loss widened over 3X to INR 111.1 Cr in the financial year 2021-22 (FY22) from INR 32.5 Cr in the previous year. Revenue from operations quadrupled to INR 71.1 Cr from INR 16.9 Cr in FY21, while total expenses grew 74% to INR 189.3 Cr in FY22 from INR 108.6 Cr in FY21.
Despite its remarkable financial backing and substantial valuation, Khatabook has faced challenges in terms of financial performance. In the fiscal year 2021-22 (FY22), the startup reported a net loss of INR 32.5 crore in the previous fiscal year to INR 111.1 crore in FY22. However, the company experienced a substantial increase in revenue from operations, quadrupling from INR 16.9 crore in FY21 to INR 71.1 crore in FY22. These financial figures indicate that while Khatabook has experienced substantial revenue growth, it has been contending with escalating expenses. Total expenses surged by 74 percent, reaching INR 189.3 crore in FY22, compared to INR 108.6 crore in FY21.