In a recent turn of events, Third Wave Coffee, a specialty coffee and food startup backed by Nikhil Kamath, co-founder of Zerodha, has announced layoffs as part of a strategic review to enhance efficiency. The decision to downsize the team comes amid the ongoing Funding Winter, sparking concerns within the startup industry.
While the company has not officially disclosed the number of employees affected by the layoffs, reports from the IANS news agency suggest that the figure could be close to 100, constituting approximately 10% of the company’s workforce. The impact of the layoffs extends across various departments, including technology, finance, marketing, business development, and app development.
Interestingly, the decision to initiate layoffs comes on the heels of a recent successful funding round for the Bengaluru-based startup. In a Series C funding round, Third Wave Coffee raised a substantial $35 million (around Rs 291 crore). Notable participants in this funding included major players like Cregys, Westbridge Capital, and Sujit Kumar of Udaan. Noteworthy investors such as Nikhil Kamat, Gaurav Munjal, and Roman Saini of Unacademy also contributed to the funding round.
Despite the recent injection of funds, Third Wave Coffee’s strategic review has led to the restructuring of its workforce, underscoring the challenges faced by startups even amid successful funding endeavors. The move to optimize efficiency through layoffs aligns with the evolving landscape of the startup ecosystem, where adaptability and strategic decision-making are imperative for sustainability.
Reports indicate that some senior employees have been affected by the layoffs, and the impacted individuals are being provided with a 2-month advance salary. Additionally, the company has offered an option for employees to continue working until February 15 if they desire.
Founded in 2017 by Ayush Bathwal, Anirudh Sharma, and Sushant Goyal, Third Wave Coffee has rapidly expanded its presence, boasting around 100 stores in major cities across India, including Mumbai, Bengaluru, Delhi, and Pune. The company’s decision to streamline its operations through layoffs reflects the broader challenges faced by startups, even those experiencing recent funding successes. As Third Wave Coffee navigates these changes, the startup industry keenly observes how strategic shifts will impact its trajectory in an environment marked by Funding Winter uncertainties.