from India VerSe innovation — the $5 billion Indian startup behind news aggregator Dailyhunt, short video platform Josh and hyperlocal video app PublicVibe — has laid off 150 employees, or 5% of its 3,000 workforce, australiabusinessblog.com has learned and confirmed.
The Bengaluru-based startup notified affected workers on Friday and separately held a town hall meeting on Monday where it announced pay cuts for the remaining staff, people familiar with the matter told australiabusinessblog.com.
It’s a big turn for VerSe Innovation, which is backed by Google and Microsoft and raised more than $800 million in new funding in April this year. The change shows how much the advertising market has bottomed out, how that affects high-profile consumer companies that rely on it, and how that extends to even some of the fastest-growing digital markets like India.
“Given the current economic climate, we, like other companies, have been reviewing our strategic priorities. Given the long-term viability of the business and our people, we have taken steps to implement our regular biennial performance management cycle and made performance and business considerations to streamline our costs and our teams,” said Umang Bedi, co- founder of VerSe Innovation, in a prepared statement responding to questions originally sent on Saturday.
He also confirmed that the startup was taking an 11% salary cut for all remaining employees with salaries above $12,200 (10 lakh Indian rupees) per annum.
“We remain extremely committed and optimistic about our entire family of apps – Josh, Dailyhunt and PublicVibe – driving profitable growth,” he said.
In April, VerSe Innovation raised $805 million at a valuation of nearly $5 billion in a Series J round led by Canada Pension Plan Investment Board (CPP Investments), Ontario Teachers’ Pension Plan Board (Ontario Teachers’), Luxor Capital , Sumeru Ventures, Sofina Group and Baillie Gifford.
The then-startup said its Josh app — one of the local alternatives to TikTok, which India banned in mid-2020 — had risen to more than 150 million users, including 50 million creators. Similarly, Dailyhunt grew its creator ecosystem to over 100,000 content partners and passed the 350 million user mark, while PublicVibe grew its user base to over 5 million monthly active users.
However, that growth did not help VerSe Innovation to offset its losses.
In the legal filings, which Entrackr reported, the startup noted that its losses grew more than 217% in fiscal year 2021-2022 to $314 million (2,563 crores Indian rupees) from $99 million (808 crores Indian rupees) in the previous year. However, operating income reportedly increased by about 45% to $118 million (965 crores Indian rupees) from $82 million (666 crores Indian rupees).
VerSe Innovation is the latest Indian start-up to cut its workforce due to ongoing economic uncertainties. In recent months, Byju’s, Unacademy and Chargebee, among others, have laid off hundreds of employees.