This Healthtech Startup From Bengaluru Has Fired 600 Employees; 75% Workforce Terminated
Healthtech startup MFine has fired around 600 employees i.e. around 75% of its total workforce of 800 people this week.
It offers telemedicine services across primary, secondary and chronic care.
It claims to have over 6,000 doctors who have served 3 Mn users.
A March press release reported that it was clocking 300,000 monthly transactions.
Mysterious LinkedIn Profile
Managers of various departments broke the news to their respective team members affected over a Google Meet.
They were told that their services were no longer required.
Financial difficulties were cited as the reason in most of the cases.
Curiously, it states on LinkedIn that it had 516 employees.
However, multiple sources informed Inc42 that MFine had roughly 800 employees.
In Dire Straits
One of the employees said that the news was devastating to many people who have small kids or pregnant wives or are early earners.
The abrupt nature of this development is emphasised by the fact that it was hiring on LinkedIn until just last month.
An employee shared that the startup had run out of funds and that a future deal had fallen off, causing the mass layoffs.
Apparently most of the sales team along with the marketing team has been dissolved.
MFine will be paying 20 days’ salary for now and the remaining salary based on the notice period mentioned will be credited in the next 60 days.
Several employees are sceptical of this, since they haven’t received anything in writing.
The startup has raised close to $97 Mn in funding over the years.
Most of it was raised during the pandemic which accelerated the demand for healthcare services.
It had raised $68 Mn last year alone and its last reported valuation stands at around $450 Mn-$500 Mn.
Poor Financial Performance
A quick look at the company’s financials shows a heavy loss making situation.
In FY21, the startup posted a loss after tax worth INR 102.7 Cr while its earnings were a mere INR 12.9 Cr.
It had spent INR 116 Cr for continuing operations in FY21.
It had also reduced its employee benefit expenses from INR 39.4 Cr in FY20 to INR 30.9 Cr in FY21.
Another Startup, Another Mass Layoff
MFine is one among several startups which have laid off big chunks of their workforce in the recent weeks.
Over 5,600 employees have been laid off or terminated as a result of cost-cutting or financial constraints.
The edtech sector in particular has suffered the most with about 2,800 employees being laid off, terminated or asked to resign by the likes of Unacademy, Lido Learning, Vedantu and WhiteHat Jr.
Tough Year For Startups
As mentioned earlier, MFine had received most of its funding in the pandemic period.
Several startups were thriving with funding, launching new products, and blitzscaling in 2021.
However 2022 has been a year of reckoning, with startups scrambling to secure their survival and focus on profitability.
VC funds, and global ecosystem stakeholders are now demanding founders in their portfolio to cut down on the expenses and burn.