ReshaMandi Lays Off 80% of Workforce After Funding Setback
ReshaMandi, a Bengaluru-based technology startup specializing in silk yarn, has been forced to lay off more than 80% of its employees. The drastic downsizing, from approximately 500 employees to around 100, comes after the company’s failure to secure Series B funding.
Founded in 2020, ReshaMandi had previously secured over $40 million in equity funding from various investors, including Creation Investments and Omnivore, as well as nearly $25 million in debt. However, the company is now facing financial difficulties and legal action.
Reports indicate that 300 former employees are still awaiting pending dues and salaries. According to an Inc42 report, the company expanded too rapidly after its initial funding round in October 2021, leading to inflated revenues. The report suggests that investors like Temasek may have been aware of these issues.
ReshaMandi’s full-stack digital ecosystem covered natural fiber products from farm to fashion in the agritech space. Despite its past successes, the company’s recent attempt to raise $5 million at a valuation of $25 million was unsuccessful.
LegalPay points out that resolving insolvency cases under the Insolvency and Bankruptcy Code (IBC) can take over 600 days, highlighting the challenges the company now faces.
