The uncertainty surrounding the Covid-19 pandemic is slowly dawning on Indian startups. Initially, most companies thought that this would be a short-lived crisis and the country would soon be out of the woods. But the way India’s case count has risen over the past few days, the fight to contain the virus outbreak is likely to be a long haul.
While announcing a massive downsizing move, Ola co-founder and CEO Bhavish Aggarwal, in an email to all employees, said as more companies ask their staff to work from home, air travel limited to essential trips and vacations being put off for better times, the impact of this crisis is definitely going to be long-drawn for the ride-hailing firm.
The homegrown ride-hailing service is laying off 1,400 employees, about 35% of its workforce, to ride out the significant impact Covid-19 has had on its business. The Bengaluru-based cab aggregator’s revenue has come down by 95% over the past two months.
“It has also become evident that the coronavirus will not be eliminated any time soon. We will rather have to learn to live with the virus and resultant implications.”
– Bhavish Aggarwal, co-founder and CEO, Ola
Ola’s decision follows that of its global rival Uber’s which has so far laid off 6,700 employees as part of cost-cutting measures to combat the downturn caused by the virus outbreak. Read more.
But startups like NoBroker are swimming against the tide.
Jobs & salary hikes
Online real estate search platform NoBroker has decided to hire over 100 people and hike salaries of its existing staff at a time when real estate companies are laying off staff and cutting salaries. The hiring, which is already in process, will be across marketing, business, operations, and tech functions to support growth. The company is planning to give salary hikes in the range of 7-25% to its 1,500 strong workforce.
Why it matters
The company, which raised funding of $30 million in a Series D round from General Atlantic in April 2020, is witnessing a higher number of queries for rental housing and they also expect business to grow despite the lockdown. A majority of the fresh hiring will be for those from a technology background to support its growth and capture the industry shift to online tech. Read more.
Back in business
Nearly two months after the lockdown, e-commerce firms are back in business as most states have allowed them to sell non-essential items. This paves the way for a large-scale recovery as the pent-up consumer demand over the last 50 days is likely to last for at least the next few weeks.
Why is it significant?
Non-essentials comprising smartphones, electronics, white goods as well as fashion and apparel contribute almost 90% of sales for these ecommerce firms. Online sales of such items have resumed in Delhi, Kolkata, Hyderabad, Bengaluru, Pune, Mumbai and with a few restrictions in Ahmedabad as well. Chennai is the only major metro where e-commerce firms will not be allowed to ship non-essential goods till Lockdown 4.0 ends on May 31. Read more.
New micro VC fund
A new India-dedicated micro-venture capital fund, iSeed, has managed to bring in backers including AngelList’s Naval Ravikant and the founders of Xiaomi, Thumbtack, Flutter, Bolt and WikiHow, as well as partners of investments firms like DST Global and Matrix Partners. Micro VCs typically invest along with or after angel investors and in most cases with other venture funds in a funding round.
Anchored by Ravikant, a Silicon Valley-based angel investor, and run by Utsav Somani, India Partner for AngelList, iSeed plans to invest in 30 early-stage technology startups at an average check of $150,000. The fund size is nearly $5 million. Read more.
Hundreds of independent sellers are using misleading advertisements on Facebook to reel in customers.
Facebook’s one-rupee bazaar
Hundreds, maybe thousands, of independent sellers on the social media company’s marketplace are using false advertising to lure customers and push up their listings to the top of the marketplace page. They don’t intend to honour the sale at that price, of course. A textbook example of a bait and switch scheme.
What’s the deal?
Unlike other ecommerce firms, Facebook’s marketplace is unregulated and tends to be riddled with misleading listings because of the absence of a transaction layer. Essentially, it is lead generation. Read more.
- Sundar Pichai on managing Google through the pandemic. Read more at The Verge.
- Here’s Facebook’s new plan to make you shop on Instagram. Read more at Recode.
- We are all livestreamers now, and Zoom is our stage. Read more at Wired.