In order to focus on profitability amid “changing market conditions,” Chiratae-backed health tech startup HealthifyMe has laid off 150 employees, or 15 to 20% of its workforce. According to HealthifyMe, the decision was made because its growth needed to meet its projections, and it had not been actively hiring at a time when many other new-age firms had done so to save costs while waiting to see how long the financing winter would persist.
“We have had to take the tough decision to let go 150 of our team members. Unfortunately, like much of tech, growth hasn’t kept pace with expectations and hiring,” the company said in a statement on December 4.
As a result of macroeconomic challenges, a growing number of technology companies are turning to layoffs, including HealthifyMe. Since the beginning of 2022, technology startups in India have let go of close to 18,000 staff.
Employees from SME (subject matter expert), quality analytics, product, and marketing roles were reportedly affected by the firings at HealthifyMe on December 3. “We are also undergoing an evolution with our new vision around metabolic health (HealthifyMe 2.0), which requires different resources. In view of this and changing market dynamics, it made sense for us to steer toward profitability, despite a comfortable runway,” HealthifyMe added.
HealthifyMe have provided severance packages to the fired employees
HealthifyMe, a Bengaluru-based health, and fitness company, have provided the fired employees with a two-month severance package with two weeks of startup service each year.
The business stated that in addition to continuing to offer the vested stocks through March 2023, it would also provide medical insurance through June 2023. In addition, to those who were impacted, it provided counseling and job placement assistance.
Tushar Vashisht and Mathew Cherian founded HealthifyMe in 2012. Through lifestyle tracking, access to diet and exercise coaches, and the use of its artificially intelligent nutritionist, HealthifyMe offers demonstrable results on eating habits, fitness, and weight.
The startup raised $75 million in a Series C financing headed by US-based LeapFrog and venture capital firm Khosla Ventures, which specializes in health tech, in July 2021.
Along with previous investors Chiratae Ventures, Inventus Capital, and Sistema Asia Capital, the round also included HealthQuad, Unilever Ventures, and Saudi Arabia-based public investment fund Elm.
The startup saw an operating revenue increase of 115 percent, from Rs 86 crore in FY21 to Rs 185.2 crore in FY22. However, according to the ministry of corporate affairs website, the net loss increased by over eight times to Rs 157 crore in FY22 from Rs 19 crore in FY21.