Tiger Global-backed ShopClues, which just three years ago had reached the coveted unicorn status, may well be on its last leg, and may have just enough money in the bank for a few months. ShopClues is said to have less than Rs 10 crore in the bank, as per sources aware of the developments in the company.

The company has been cutting cost by laying off people, and reduced its team size to nearly half last week, laying off 200 of its 500 employees. In fact, sources say there are more layoffs in the pipeline, and the number of employees could come down to 200 by this week.

ShopClues has also been delaying salaries of senior management employees, the sources added.

ShopClues confirmed a 'restructuring' but did not share specific details on the layoffs and runway ahead.

"In the last two years ShopClues has continued its journey to enable MSMEs & service tier 3/4 consumers from it platform. It has launched multiple lines of businesses besides it core B2C marketplace which has gained traction in the last two years. Our Enterprise Business is now 15 percent of our revenues and Ezonow, our social selling platform, has crossed 8 lakh in resellers base," the company said in a statement.

"During this period we have reduced our losses by 85 percent via cost reduction and contribution expansion. Our recent restructuring allowed us to leverage our technology to reduce operational costs and we have outplaced about 15 percent of our workforce, mostly in operations,' ShopClues said.

ShopClues' last lifeline was a distress sale, and the company had met with multiple players, most recently also entering into a due diligence with Snapdeal.

The talks between Snapdeal and ShopClues, however, fell through after a due diligence report on ShopClues threw up red flags.

The due diligence done by EY and PwC pointed to liabilities of around $50 million, as per sources. The report also highlighted pending litigation, which put off the acquirer.

ShopClues has been on a cost-cutting spree for some time now, having reduced losses from Rs 210 crore in 2017-18 to less than Rs 45 crore in 2018-19, but it also consequently saw its marketshare shrink to 1.6 percent in 2018, according to Forrester.

The company, founded in 2011, has raised over $250 million from Tiger Global, GIC Singapore, Nexus Venture Partners and Helion Ventures.

First Published:Jul 23, 2019 3:22 PM IST