Fintech start-up Khatabook fires employees in fresh round of layoffs: Sources

Bengaluru-based fintech company Khatabook has fired employees in a fresh round of layoffs on Thursday. The layoffs targeted employees in engineering, product and marketing verticals, sources aware of the matter told Business Today.

An employee who was working as Backend SDE, who was impacted by the latest round of layoffs, said: “Tech as well as non-tech roles were impacted, [along with] engineering, product, marketing, etc.”

The engineer also noted that the company paid the separated employees three months salary in severance along with extension on insurance.

“We got a three month salary as runway and extension on ESOP vesting. Medical insurance was also extended,” he said.

Another source aware of the matter confirmed this and said, “They are trying to cut costs to attain profitability.”

The company responded to Business Today's queries and said, "In-line with our profitability goals, we are reorienting some parts of our business which requires us to operate with a leaner team on certain business lines. This restructuring has impacted 6% of our 700 employees. All impacted employees have been provided with a separation package which covers 3 months of salary."

As per regulatory filings, in FY22, the company’s revenue from operations stood at Rs 71.1 crore, up four times. The company’s losses, however, stood at Rs 111.1 crore.

It is worth noting that employee benefit accounted for the biggest share in the fintech company’s expenses. They stood at Rs 101.1 crore, up 173 per cent YoY. Communication expenses came in next and stood at Rs 24 crore, up 200 per cent.

Khatabook is a book keeping app and a lending platform founded by Vaibhav Kalpe. The company was acquired by Kyte Technologies, another fintech player, in 2018.

The company was last valued at $600 million in August 2021, as per its Series C round. The fintech raised $100 million from investors like Tribe Capital, Moore Strategic Ventures (MSV), Alkeon Capital, Sequoia Capital, Tencent, RTP Ventures, Unilever Ventures, Better Capital, and others.