Amazon-backed home services startup Housejoy lays off 40 employees
Bengaluru-based home services startup Housejoy, operated by Sarvaloka Services On Call Pvt. Ltd, has laid off at least 40 employees across departments, a media report said.
The Amazon-backed startup let the employees go to cut costs amid slow revenue growth, The Economic Times reported, citing industry insiders it didn’t name. Several exits are at mid-management levels across digital marketing, technical and back-end operations teams, it said.
The company didn’t respond to TechCircle’s email queries till the time of publication of this article.
The report also said that Housejoy will shut down categories with low profit margins such as specialised lifestyle and health services. It would now focus on fulfillment categories such as beauty and handyman services that enable a transaction model, the report said, citing a person familiar with the developments.
Housejoy competes with the likes of UrbanClap and Quikr. Earlier this month, TechCircle analysed the financials of Housejoy and found that its operational expenses for 2016-17 were above Rs 8 crore a month, four times higher than its monthly revenue, as per documents filed with the Registrar of Companies.
The analysis also indicated that Housejoy might have already spent the Rs 150 crore ($22.4 million) it had raised from Amazon, Matrix Partners India, Vertex Ventures and other investors in December 2015.
In an indication that all was not well at Housejoy, its founders reportedly quit the startup last year. The company is now led by CEO Saran Chatterjee, a former Flipkart executive who was hired in 2015.
Home services startups have been in troubled waters for quite some time. Many have tweaked their businesses, shut shop or axed jobs. Some smaller players have also been acquired by bigger rivals.
Quikr, for instance, has struck a number of acquisitions. Housejoy itself had made two acquisitions in 2016—at-home personal fitness tech startup Orobind Fitness Technologies Pvt. Ltd, and cleaning and laundry startup MyWash Technologies Pvt. Ltd.
In June 2016, LocalOye, backed by Tiger Global and Lightspeed Venture Partners, pivoted its business model to focus more on business-to-business (B2B) customers for better monetisation.
In February 2016, Mumbai-based home services startup Zimmber acquired Gurgaon-based FindYahan. In September 2016, Mumbai-based DoorMint pivoted to laundry services in Mumbai and closed down its Bengaluru and Gurgaon operations.