Bengaluru’s Reshamandi Sacks 500 Employees, Shuts Site, Auditors Quit

ReshaMandi, a Bengaluru-based B2B startup specializing in silk yarn products, has reportedly shut down and laid off all its 500 employees after its auditor resigned, which coincided with the shutdown of its website for the past whole week, according to a report by Entrackr.

Founded in 2020, ReshaMandi raised over $40 million in equity funding from investors including Creation Investments, Omnivore, and Venture Catalysts, and Rs 300 crore in debt from venture debt investors and lenders. However, creditors and vendors suspected financial irregularities. Now, with the ouster of its auditor, it appears to be a confirmed story.

The company enjoyed early success spiraling down after pushback because of financial difficulties, resulting in employee layoffs beginning in June 2023. Reportedly, ReshaMandi's former auditor Walker Chandiok & Co LLP, raised several concerning points before resigning last month. 

Entrackr reported, “It’s all over for ReshaMandi. The company is struggling to pay liabilities and bear operational costs including salaries for the past several months,”

The company reportedly downsized its workforce by 80% in June.

The downsizing reduced the workforce from 500 employees in January 2023 to around 100 by the end of the year, leaving over 300 employees awaiting their final dues and salaries. 

Saurabh Kumar Agarwal, ReshaMandi's CTO and founder, admitted the company's financial difficulties, which led to operational downsizing and staff reductions. They were unable to support the audit firm in completing the financial statements for the fiscal year 2023.

Social Media Reaction:

Online users criticise Agritech startup for being transparent about the financial issues with the investors and the involved employees.

One user wrote, "Reshamandi was the poster child of Indian Agritech for at least a couple of years. The fall is shocking."

Another user commented, "They opened an office here an year back, I could never make out what they were into. Looked like a Saree business but it was an office also. My wife says, it’s highly expensive and overrated. Don’t know anyone who bought there. Now it’s permanently closed. Not surprising though!!"