Spinny, a company that sells used cars and is supported by Tiger Global, has let go of about 300 employees to reduce costs. The hardest hit by these job cuts are the staff from two divisions, Truebil and Spinny Max, as they are being merged. The CEO, Niraj Singh, announced the layoffs during a meeting on August 2. This downsizing comes at a time when the demand for used cars has decreased across the industry after a period of rapid growth during the COVID-19 pandemic.
One of the sources informed Moneycontrol that “the company has told employees that both Truebil and Spinny Max will now be merged and operate under the main Spinny brand because of which there will be job redundancies.”
In 2020, when many startups were striking deals, Spinny, a company that sells used cars, acquired Truebil, another company in Mumbai that was its competitor. Spinny wanted to expand its business in the affordable car market, so this acquisition helped them do that. Spinny Max, a different part of Spinny’s business, focuses on selling pre-owned luxury cars from brands like BMW, Mercedes, and Jeep. This means they sell more expensive cars and make more enormous profits from these sales.
Layoffs at Spinny Due to Merger of Divisions for Better Business Model
Around 6,000 to 6,200 people work at Spinny, and the recent layoffs are affecting about 5 per cent of their employees, as per information from Moneycontrol. Truebil’s website used to function separately, but now it redirects its customers to the main Spinny website.
Some employees shared their layoff experiences on LinkedIn. One person announced, “I would like to announce that I have been laid off (from) Spinny… My tenure here was a very enriching but short-lived one. As bitter as this may be, life goes on…”
A spokesperson from Spinny confirmed that they were merging two divisions. This move was aimed at improving their business model, cutting costs, and increasing profitability. However, it also meant that about 4.5 per cent of their total workforce would be affected as they combined operations under a single brand.
The reason behind the reorganization was the company’s growing demand for reliable and affordable cars, especially since many people had returned to their offices. By having inventory spread across different brands, Spinny sometimes couldn’t offer enough choices to these customers. With the consolidation, they aimed to better serve the needs of these customers.
Spinny’s Growth and Funding Success
Spinny is based in Gurugram and competes with SoftBank-backed Cars24, which also went through layoffs in May 2022, affecting about 7 per cent of its employees. Indian startups are facing financial challenges, leading them to cut costs and lay off over 25,000 employees since early 2022, as reported by Moneycontrol in June.
In the used-car industry, there is a trend of companies coming together. In July, CarTrade Tech, an online auto platform, announced its acquisition of OLX India’s operations for Rs 537 crore. OLX Autos is a direct competitor to Spinny, another company in the same space. Spinny, which has more than 55 car hubs across 22 cities, remains optimistic. Last year, it opened its largest hub, a five-acre park in Bengaluru.
According to CEO Singh’s statements to Moneycontrol, the average car selling price in Bengaluru is the highest at Rs 6.4 lakh, compared to the country’s average order value of Rs 5.7-5.8 lakh. Spinny, founded in 2015, has raised approximately $530 million so far, including a $283 million round in November 2021, making it India’s fourth online car retailer unicorn after Cars24, CarDekho, and Droom. Valued at around $1.6 billion, Spinny is supported by notable investors like Abu Dhabi’s ADQ, General Catalyst, Blume Ventures, and Accel, as reported by Tracxn, a private markets data provider.
