According to sources aware of the matter, the company has seen a drop of over 30% in its annualised gross merchandise value (GMV) run rate at around $600 million compared to its peak GMV run rate of $900 million (based on current dollar rate).
This is also due to the Matrix Partners-backed firm’s bid to cut its monthly burn to save cash and extend its runway amid the ongoing funding crunch.
Dealshare founder Sourjyendu Medda confirmed the development to ET.
“We have removed 100 roles and this is linked to our business plan for the next financial year,” he said. According to Medda, the company has managed to reduce its monthly burn significantly.
“Given the massive market downturn that started early to mid last year, we had to rethink our business strategy and correspondingly make changes to our execution plan. From a strong focus on growth to achieve a large market share, we made substantial changes to our plans to focus on first driving profitability,” said Medda. “This has led to our burn falling to less than 40% of our peak burn and our cash runway increasing to close to four years.”
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He added that Dealshare has also, in this process, reduced its focus on several initiatives and contained its geographical spread, which would have needed cash investments for long “before becoming totally profitable, resulting in our gross revenue getting rationalised to close to 60% of our peak revenue”.
ETtechDealshare expanded to about 150 cities and towns last year and it has now paused operations in bottom 20% of these.
Bengaluru-based Dealshare has been repositioning itself as a direct-to-consumer ecommerce firm offering a range of products to low-income consumers. It had started off as a group buying platform but has since pivoted and the bulk buying model is a negligible part of its total business.
Dealshare sells grocery and other essentials along with general merchandise products. They also sell some fashion items largely in the Rs 300-400 average selling price segment.
“(Dealshare) has also seen its gross sales drop as it has been trying to cut down on burn,” one of the people mentioned above said.
Started by Medda, Vineet Rao, Rajat Shikhar and Sankar Bora in 2018, Dealshare also supplies goods to kirana (corner) stores along with building a B2B2C model whereby customers can buy goods they find online at a nearby offline kirana store that the company has partnered with.
It became a unicorn in January last year after closing a $165 million funding round from Tiger Global, Alpha Wave and others. It also roped in former Big Bazaar chief executive Kamaldeep Singh as president of its retail business in December 2022.
At the time of Singh’s appointment, Rao said Dealshare was clocking about 400,000 orders a day.
Startup layoffs
Dealshare’s job cuts underscore the growing trend among startups looking to restructure operations and carve a path to profitability. Startups like ShareChat, Swiggy, Dunzo, Rebel Foods, Innovaccer and others have fired scores of employees, citing a tough liquidity market, overhiring and overestimating growth for the year.
“Our over-hiring is a case of poor judgement and I should have done better here,” Swiggy chief executive Sirharsha Majety told employees after firing 380 of its staff.
(Illustration and graphics by Rahul Awasthi)
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