Exclusive | Overestimated the growth of e-commerce, had to take hard decision to say goodbye to talented employees: Simpl CEO

Layoffs have become a common occurrence as startups tighten their belts to deal with market uncertainty and an extended funding winter. Last week, BNPL soonicorn Simpl trimmed 25 percent of its workforce totalling over 150 employees in a bid to cut costs and extend the cash runway.

In an exclusive chat with CNBC-TV18, Co-founder and CEO Nitya Sharma said he was left with no choice but to take the hard decision as the company overestimated the growth of e-commerce.

“I had to take the hard decision to say goodbye to very talented people who got us where we are today. One thing we realised as we were planning for next year was — the growth we were expecting in the e-commerce space in the next two years was definitely an optimistic assessment,” Sharma added.

He further stated, “As we stood this year, we realised we need to become operationally more efficient so that we are able to focus on the most important customer priorities. There’s so much room to cover in the e-commerce space. The macro-economic condition last year was very different and allowed us to think we should probably hire a lot more people and work on many things parallelly.”

The CEO said there are no plans for further job cuts within the company and the focus will be on performance and growing the business.

In FY22, Simpl clocked over 17 times surge in its revenue to Rs 31.63 crore as compared to Rs 1.81 crore in FY21. Meanwhile, the company’s losses also ballooned 22.5 times to Rs 144.28 crore in FY22 from Rs 6.39 crore in FY21.

“Our revenues stand in mid-double digits million dollars for FY23,” Sharma told CNBC-TV18, adding, “We are not looking at profitability in the next couple of years. Our business is such that if we want to turn profitable, we can in the next two years. We want to focus on efficient growth at the moment and investing in the growth of the customer, merchant base and technology.”

Simpl secured $40 million in December 2021 and to date, the firm has raised $83 million across several funding rounds. The company however has no plans to raise funds in the near future.

“Our business is relatively capital efficient. Unlike a traditional payment company, we focus on merchants and our customers are retailers. What that enables us to do is run a very efficient business and we don't have the traditional burns that so many payment companies have around customer acquisitions. Currently, we are not planning to raise money and focusing on investing our resources efficiently. We also believe this is not the right market to raise funds in,” added Sharma.

The company claims to be working with 25,000 online retailers and has five million active users. Simpl is now looking to double its merchant network to 50,000 by the end of 2023.

The company recently announced its partnership with Klub, a Revenue Based Finance company, to provide easy access to credit for the Direct-to-Customer (D2C) merchants and support them in meeting their working capital requirements. This partnership will enable credit access to merchants at affordable interest rates with flexible terms in a completely digital fashion.

Simpl co-founder also said that they are in talks with Open Network for Digital Commerce (ONDC) for a partnership. According to ONDC, in India, more than 12 million sellers earn their livelihood by selling or reselling products and services. However, only 15,000 of these sellers have enabled e-commerce.

“I feel ONDC will make e-commerce bigger and make it more democratic. We are building all tools where retailers can deliver experience to users which is at par with large platforms. We are having conversations with ONDC to understand how we can work closely with them,” said Sharma.