ReshaMandi, a Bengaluru-based business-to-business (B2B) marketplace specializing in silk yarn products, has laid off 80% of its workforce due to its failure to secure Series B funding. The company has been significantly downsizing its operations since last year.
From 500 employees in January 2023 to reportedly around 100 by the end of the year, the company scaled down heavily.And in the process, 300-odd employees are still awaiting their final dues and salaries. According to a report in Inc42, quoting the company’s employees, ReshaMandi’s downfall was due to rapid expansion across verticals, immediately before and after it raised funds in October 2021. “The company fell victim to the growth-at-all-costs mindset, which drove it to inflate revenues in FY23 and FY22. It’s very likely that Temasek and other investors caught wind of the allegations now being raised by employees on social media and in their conversations with us,” the report further adds
The downslide started months before
Founded in 2020, ReshaMandi raised over $40 million in equity funding from investors such as Creation Investments, Omnivore, Venture Catalysts, and others. Additionally, it secured nearly Rs 300 crore (approximately $25 million) in debt from venture debt investors and lenders. However, the company now faces court cases from creditors and vendors, with some planning to file for insolvency.
Despite its previous success, ReshaMandi encountered financial challenges, leading to employee layoffs starting in June 2023. Employees were offered the opportunity to work without salaries for three months, but unfortunately, pending salary payments remain unpaid.
ReshaMandi’s full-stack digital ecosystem covers natural fiber from farm to fashion in the agritech space. Notably, it has raised a total of around $70 million in equity and debt funding, with Creation Investments and Omnivore among its backers.
The company’s latest funding round, a combination of equity and debt, involved participation from investors like Omnivore, 9 Unicorns, Venture Catalysts, and others. However, despite previous valuations, ReshaMandi’s recent attempt to raise $5 million at a valuation of $25 million was unsuccessful.
LegalPay, a tech-based interim financier, highlights that resolving insolvency under the Insolvency and Bankruptcy Code (IBC) typically takes 632 days, exceeding the stipulated 270 days. Self-initiation of insolvency has both advantages and risks, including timely action, creditor settlements, but also potential loss of control and asset value.
From 500 employees in January 2023 to reportedly around 100 by the end of the year, the company scaled down heavily.And in the process, 300-odd employees are still awaiting their final dues and salaries. According to a report in Inc42, quoting the company’s employees, ReshaMandi’s downfall was due to rapid expansion across verticals, immediately before and after it raised funds in October 2021. “The company fell victim to the growth-at-all-costs mindset, which drove it to inflate revenues in FY23 and FY22. It’s very likely that Temasek and other investors caught wind of the allegations now being raised by employees on social media and in their conversations with us,” the report further adds
The downslide started months before
Founded in 2020, ReshaMandi raised over $40 million in equity funding from investors such as Creation Investments, Omnivore, Venture Catalysts, and others. Additionally, it secured nearly Rs 300 crore (approximately $25 million) in debt from venture debt investors and lenders. However, the company now faces court cases from creditors and vendors, with some planning to file for insolvency.
Despite its previous success, ReshaMandi encountered financial challenges, leading to employee layoffs starting in June 2023. Employees were offered the opportunity to work without salaries for three months, but unfortunately, pending salary payments remain unpaid.
ReshaMandi’s full-stack digital ecosystem covers natural fiber from farm to fashion in the agritech space. Notably, it has raised a total of around $70 million in equity and debt funding, with Creation Investments and Omnivore among its backers.
The company’s latest funding round, a combination of equity and debt, involved participation from investors like Omnivore, 9 Unicorns, Venture Catalysts, and others. However, despite previous valuations, ReshaMandi’s recent attempt to raise $5 million at a valuation of $25 million was unsuccessful.
LegalPay, a tech-based interim financier, highlights that resolving insolvency under the Insolvency and Bankruptcy Code (IBC) typically takes 632 days, exceeding the stipulated 270 days. Self-initiation of insolvency has both advantages and risks, including timely action, creditor settlements, but also potential loss of control and asset value.
