Mensa Brands, the roll-up e-commerce company founded by former Myntra CEO Ananth Narayanan, has recently terminated over 200 employees across various divisions, with India Lifestyle Network (ILN) experiencing the greatest impact. The company, has however admitted that the numbers are less than 30.
The company, which has a team of around 750-800 employees, is reducing its workforce by approximately 25 per cent as part of a cost-cutting initiative. This downsizing at India’s fastest-growing unicorn is happening amidst concerns raised by investors and market players about a slowdown in the roll-up e-commerce market.
After acquiring Times Internet in December 2022, Mensa Brands incorporated India Lifestyle Network (ILN) into its expanding portfolio, alongside MensXP, iDiva, and Hypp.
According to sources, employees from India Lifestyle Network (ILN) were individually called for meetings with HR executives and were subsequently asked to leave the following day. While some employees received two months’ pay as compensation, a significant number of them were only given one month’s salary and required to leave immediately.
Despite prior assurances from Narayanan during the acquisition talks, the decision to let go of ILN’s employees was ultimately made.
According to the same source, the reason employees were asked to leave was due to Mensa’s perception of their sudden underperformance.
Mensa Brands follows a business model similar to the US-based Thrasio, which involves acquiring profitable online sellers on Amazon with positive reviews and then leveraging technology, marketing, and product growth expertise to accelerate their growth and establish a portfolio of brands.
During the period between October 2021 and December 2022, the Tiger Global-backed company successfully acquired a minimum of 17 companies, including notable ones like MyFitness, Dennis Lingo, and Villain. However, the pace of acquisitions has slowed down since then.
A spokesperson from Mensa Brands refuted the claim of 200 layoffs, stating that fewer than 30 positions were affected in ILN, with support provided to those impacted. He also added, “ILN is committed to providing the best content to its consumers and industry-leading services to its client partners. To enhance efficiency post integration, we restructured some teams that impacted a few positions. This activity affected less than 30 team members in ILN and there have been no layoffs in other parts of Mensa till date. We are fully dedicated to supporting those affected by providing each of them up to three months salary, extended health insurance and support in finding new roles.”
Mensa’s decision to restructure teams reflects a trend among new-age companies aiming to streamline operations, boost efficiency, and meet investor demands for profitability.
Meesho, Swiggy, ShareChat, and other major startups have also downsized their workforce on the path to profitability. This year alone, approximately 6,150 startup employees have been laid off, while since 2022, around 24,500 workers have been affected.
Notably, Mensa, despite claiming profitability and raising over $200 million from investors like Accel, Alpha Wave Global (previously known as Falcon Edge), and Prosus, decided to downsize.
Mensa achieved a valuation of over a billion dollars within just six months of its establishment when it raised $135 million in November 2021. Other players in the roll-up e-commerce field include GlobalBees, GOAT Brand Labs, Evenflow, Powerhouse 91, 10Club, and Upscalio.
