SUMMARY
- BeepKart laid off 130 workers over five months due to cash shortages and cost-cutting measures.
- The firm closed six stores in Bengaluru and Chennai, struggling to scale and facing losses.
- BeepKart’s attempts to raise prices backfired, driving customers to competitors in the crowded market.
In three waves of layoffs over the previous five months, Bengaluru-based secondhand two-wheeler marketplace BeepKart has laid-off of about 130 workers as part of a cost-cutting measure due to a cash shortage, as reported by Inc42.
In the last 5 months, the company has let go of about 40% of its workforce in total. The business laid off 60–70 workers from its Bengaluru and Chennai headquarters and stores during its most recent reorganization, which took place in the final week of September.
One of the sources stated, “We were told the company was struggling to scale and didn’t have much cash to bear the cost, hence it was decided to undertake another round of layoff.”
As per the sources, the firm closed six of its eleven locations in Bengaluru and Chennai during the previous five months as part of this cost-cutting initiative. Severance pay depending on notice periods was offered to the affected employees.
Another source said, “Near the end of the last year, Beepkart decided to expand its operations by opening new stores and hiring aggressively”. The person added that the firm was aiming for a sharp increase in its top line to earn a profit.
As one of the sources stated, “The stores in Jayanagar and Kormangla were in the radius of just 4 kilometers. These stores cut each other’s market share, rather than adding new customers. The same happened with Poonamallee and Porur in Chennai.”
In an effort to save money, the firm modified its refurbishment procedures after this. According to the sources, this led to low quality cars and complaints from customers. Meanwhile, the firm’s attempt to boost profits by raising prices failed as consumers flocked to the startup’s rivals in the congested market.
Hemir Doshi and Abhisekh Sharaf founded Beepkart in 2021. It is a full-stack platform that lets customers purchase and trade motorcycles online. The firm provides its services in Chennai and Bengaluru.
In FY23, the company had operational revenue of ₹22 crore but incurred a net loss of ₹28 crore. Additionally the firm has managed to secure a total funding of nearly $18 million to date. The firms current investors are Vertex Ventures, Stellaris Venture Partnets, Chiratae Ventures and Innoven Capital.
