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Mountain comes to the Mohammed: Start-ups want 'profits'

start ups want to profit

start ups want to profit Flipkart

 

Eight-year old, Flipkart, India's largest e-commerce company is finally keen to behave like any other sensible business venture by working towards cutting costs and posting profits. After burning an estimated $50 million a month and clocking up more than ₹2000 crore in losses, the company is now focussed on becoming profitable.

 

It's cutting costs, rationalising staff, hiking commissions that it charges from sellers ( 10%-40%) and has reduced its return policy to 10 from 30 days. Apart from its profit-making categories such as fashion, electronics and large appliances, Flipkart now also wants to push furniture and automobiles to garner higher revenues. 

 

After Binny Bansal replaced Sachin Bansal as CEO, he has been overhauling the system at the management level and said the firm was expected to turn profitable in three years. This after Sachin Bansal famously said, "We don't want to remain a small profitable company."  This change in track comes at a time when global investors questioned its $15 billion valuation and wrote down their investments by more than 30%, yanking its valuations down to $10 billion now.

start ups want to profit

Zomato

Zomato, India’s largest restaurant guide listing over 42,000 restaurants across 12 cities in the country, is also in the midst of a major organisational overhaul. Recently it lost its unicorn status as its valuations were slashed by half. It let go of 300 employees, shut down its cashless business in international markets and changed its strategy towards profits.

 

Zomato backed Pickingo too faced problems and had to halt its hyperlocal delivery service. In early 2016, Zomato shut down its food ordering service in four cities - Lucknow, Kochi, Indore, and Coimbatore. In February 2016, Zomato said that it had broken even in six markets (including India) and was on track to make a profit by June 2017.  

 

 

start ups want to profit

Foodpanda

Founded by Akhilesh Bali and Amit Kohli, Foodpanda - another food-service biggy - is a Rocket Internet incubatee, which recently went through an extremely rough patch.  Things become so bad that earlier this year, speculation was rife that Foodpanda might be shutting down and that it's up for sale for a ludicrously low sum of $10-$15 million and was apparently negotiating with competitors like Zomato and Swiggy for a complete buy-out.

 

It had to cut back operations and lay off 300 employees. Now it has implemented automation of its order flow to become operationally efficient, "The last six to eight months, we have worked on near 100% automation of order flows to ensure operational efficiency to meet our target of becoming profitable in the next three years," Foodpanda CEO Saurabh Kocchar told PTI.

 

start ups want to profit

Housing.com

 

Online real-estate portal, Housing.com, that famously fired its controversial founder Rahul Yadav went through a major upheaval, clocked up losses, fired 800 employees, shut a few departments and was reportedly negotiating with Snapdeal and PropTiger for a stake-sale.

 

The company has now undergone  a major restructuring exercise, and is on track to achieve $10 million in revenue this fiscal year, according to a company statement. Jason Kothari took over as the new CEO in November last. The company recently scaled down its listings and rentals, commercial properties, short stays and land businesses and increased focus on the home buying and selling business.

start ups want to profit

Tiny Owl

Last year, Tiny Owl was unable to sustain its operations and had to resort to massive downsizing. This after being an investor favourite and getting $28 million in funding from VCs like Sequoia Capital, Nexus Venture Partners, Matrix Partners and angel investors like Kunal Bahl and Rohit Bansal (founders of Snapdeal). Last November, it shut its offices in Chennai, Pune, Hyderabad and Delhi and laid off 112 employees.

 

In a statement, the company said that it has undergone an organisational restructuring to increase its efficiency and productivity, involving eliminations of certain positions from the company, as part of this process. Then earlier this month, hyperlocal delivery start-up Roadrunnr said it has acquired TinyOwl and  also rebranded itself as Runnr. 

Images courtesy Guruprasath R

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