InMobi, the poster boy of Indian start-ups that attracted top investors and talent from the technology industry, is laying off nearly 10 per cent of its staff.
The cutbacks, which affect about 100 people out of headcount of 1,000, is the latest sign of the mobile advertising network's struggle to survive cut-throat competition from the likes of Google and Facebook. The Bengaluru-based company competes with these firms in the market for data-driven mobile advertising. “They (InMobi) had high hopes from their products, but they are not meeting their revenue targets and the burn rates are not coming down,” said a person with direct knowledge of the layoffs at the company.
The fresh venture funding has also cooled down for the firm which is backed by top investors---Japan's SoftBank, Kleiner Perkins Caufield & Byers and Ram Shriram's Sherpalo Ventures. It received an investment of $200 million (about Rs.1,330 crore) from SoftBank in 2011, helping it to become a 'Unicorn' or a start-up with a market cap of over $1 billion (Rs.6,661 crore). “Investors have told them (InMobi) to reduce costs,” said a person aware of the developments at InMobi, but did not wish to be named. “The layoffs have happened from the senior executive level to the programmer ranks.”
In response to an email query, an InMobi spokesperson said that employees exit for various reasons like career aspirations and starting their own ventures. "We also let go of a few people for performance reasons each year," said the InMobi spokesperson. The spokesperson said the company has a strategic plan for 2016 to drive growth and has hired 40 new people this year and rolled out offers to over 48 engineers and management graduates.
Another person with knowledge about headcount reduction at InMobi said layoffs at the firm are based on "Last in, first out method". In other words, the staff hired last are the ones that would be shown the door.
Industry experts said layoffs at tech start-ups are rising as mega-funding rounds in new-age firms as well as the valuations of these companies are coming down.
“But existing players such as Flipkart and Ola will continue to raise funding, but their valuation, too, will come down,” said Kris Lakshmikanth, chairman and managing director at executive search firm The Head Hunters India. This February, online retailer Snapdeal put around 200 employees on notice. Last year, real estate portal Housing.com laid off 600 of its 2,251 employees; TinyOwl, a food delivery start-up, laid off 100 employees; and Zomato, another food tech player, laid off 300 employees.
InMobi's revival strategyLast July, the nine-year-old company launched an artificial intelligence discovery platform, Miip, touted to be InMobi’s path to billion dollar revenues. It displays ads to people about products and services that they actually want to buy.
