ReshaMandi, the Creation Investments-backed firm, appears to have reached the end of its road as it has reportedly laid off its entire workforce, according to a report by Entrackr citing sources. The company's website has been down for the past week, coinciding with the resignation of its auditor, raising further concerns about its status.
“It’s all over for ReshaMandi,” one source said in the report. “The company is struggling to pay liabilities and bear operational costs, including salaries for the past several months,” it added.
Sources close to the company have confirmed that all 500 employees have been laid off, as per the report.
The company has faced several corporate governance issues, including allegations of revenue inflation and fraudulent invoices. The auditor Walker Chandiok & Co LLP, which resigned last month, highlighted these problems in its regulatory filings with the Registrar of Companies (RoC). The auditor's report indicated that Saurabh Kumar Agarwal, the CTO and founder, acknowledged the firm's financial difficulties, including staff reductions and the inability to support the audit firm in completing the financial statements for FY23, states the report.
According to filings, ReshaMandi owes Rs 14.16 lakh to the auditing firm. The Bengaluru-based company appointed a new auditor, Suresh Kapoor & Associates, in late July.
Additionally, ReshaMandi has experienced consecutive resignations of its chief financial officers (CFOs). In April 2023, former KPMG CFO Samadrita Chakravarty was appointed group CFO, succeeding Ritesh Kumar, who served as CFO from March 2022 to January 2023. Chakravarty also left the company in October of the same year, as reported by Inc42.
A ReshaMandi spokesperson acknowledged the company's financial difficulties in a statement to the publication and said, “ReshaMandi is facing some financial difficulties and has streamlined its staff, operations and processes to focus on collecting its pending receivables from the market. We continue to believe in coming out of this situation strong and be able to get back on track soon.”
ReshaMandi had raised over $50 million, including a $30 million Series A round in October 2021 and a $6.2 million debt round in November 2022. Its investors include Creation Investments, Omnivore, 9 Unicorns, Venture Catalysts, Northern Arc, Innoven Capital, and Stride Ventures.