People aware of these developments told MINT that electric scooter rental startup Zypp Electric has ruled at least 150 employees and introduced salary cuts related to certain goals.
Zypp’s measures were carried out shortly after it was proposed ₹Despite the multiple challenges facing the domestic electric vehicle industry, fundraising is still underway and the growing adoption of electric scooters is part of $5.5 billion.
“Since late February, the company has been firing people to cut costs, and (the layoffs continue)” said one person mentioned above.
The Gurugram-based startup said it reduced its workforce by 150 as part of a regular efficiency exercise.
“It’s not about cutting the work, but about building a scalable, high-performance team to promote our company’s growth and expand into new markets…” “As part of the routine exercises related to Key Performance Indicators (KPIs) and Key Results Areas (KRAS), our workforce will naturally adjust from 1,300 to 1,150 employees.”
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Founded in 2017 by Akash Gupta and Rashi Agrawal, Zypp Electric is a last-mile delivery startup that provides electric fleet and battery swap solutions for e-commerce, grocery store and logistics companies.
The company has raised about $80 million in capital from investors including Anthill Ventures and Venture Catalysts, worth about $322 million.
In January, Zypp received $6.5 million as part of the ongoing Series C fundraising round. According to a recent report from the Economic Times, it was in the senior negotiations that raised $250,000 to $300,000 raised by investors in Nouma Fortune.
In addition to layoffs, Zypp has proposed a policy on salary loss for team leaders, according to two people familiar with these developments.
“As part of this policy, the company offers team leaders a three-day goal that will result in a day’s loss if they fail to achieve this. The company has also created a dashboard for this.”
A ZYPP spokesman explained: “During the trial period, we started things with a dynamic, goal-based introductory system – those shining people joined our crew, and others didn’t make everything good, and everyone got pretty good efforts based on achievements.”
Electric vehicle failure
In a report late last year, global wealth management company Bernstein highlighted the challenges Indian electric vehicle companies face in expanding their profitability. “It’s hard to generate enough profits and get the size of an electric vehicle. Even with huge incentives, the current OEM (Original Equipment Manufacturer) is still unprofitable,” it said.
Although EV adoption is a global strategic priority, profitability remains a challenge. According to Paramdeep Singh, an early investor in EV logistics such as Zippee and Vidyut Tech, high battery costs and underdeveloped infrastructure have prominent scalability for venture-backed EV startups.
“These layoffs only reflect the unsustainable cost structure that forces startups to recalibrate. I expect the winners to be those who drive innovation, route optimization and cost efficiency. Investors are still confident in this resilient premium model,” Singh said.
Arindam Mukhopadhyay, partner and head of corporate innovation at India Accelerator, said investors are still very emotional about India’s electric vehicle sector.
But as venture capital investors are eager to bet on growth stage EV brands to support scale and enhance capabilities, or invest in technologies that optimize road performance, reliability, reliability and quality of electric vehicles.
The high cost of lithium-ion batteries and inaccessible charging infrastructure are common challenges for the face of the electric vehicle sector in India and around the world. Earlier this month, Ola Electric Mobility announced its decision to promote about 1,000 employees in an increasing amount of losses to drive profitability.
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Zypp’s profitability challenge
Zypp Electric said it was a good track to achieve EBITDA positive in two quarters. Revenue before interest, taxes, depreciation and amortization are key measures of operational efficiency and have become the preferred indicator of startups not yet earning money.
A Zypp spokesperson said: “We recently partnered with Indofast and Odysse to expand our EV strength and our operations are expanding as we work towards profitability and growth towards 200,000 EVS over the next 24-36 months.”
ZYPP has currently deployed about 20,000 electric scooters.
Indofast Energy, a joint venture between Indian Oil Corp. Ltd and Sun Mobility, has been bundled with Zypp to help the company expand its EV charging infrastructure. Electric two-wheeler maker Odysse Electric has been supplying electric vehicles to Zypp as part of the investment agreement.
A spokesman for ZYPP also said the company’s revenue so far in fiscal 25 has increased by about 50% in the previous fiscal year. ₹4.6 million. In 2023-24, Zypp’s operating revenue soared to ₹2.93 million ₹FY23 was 1.09 million, but the losses doubled ₹910 million ₹4 million.
“Over the next 2-3 years, our goal is to continue double-digit growth in our tricycle business through scalable teams, enhanced technology and investment in AI, expansion in other major cities, and the growth of our tricycle business,” a Zypp spokesperson said.
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