ReshaMandi, a Bengaluru-based B2B startup specializing in silk yarn products, has abruptly shut down its operations and laid off its entire workforce of 500 employees. According to a report by Entrackr, the company’s website has been offline for over a week, coinciding with the resignation of its auditor, raising concerns about potential financial irregularities.
Sources close to the matter revealed that ReshaMandi has been struggling to meet its financial obligations, including paying salaries and covering operational costs for several months. The company’s former auditor, Walker Chandiok & Co LLP, raised multiple red flags before resigning last month. Saurabh Kumar Agarwal, ReshaMandi’s CTO and founder, acknowledged the company’s financial difficulties and the downsizing of operations and staff. He also admitted that ReshaMandi was unable to provide adequate support to the audit firm for completing the financial statements for the fiscal year 2023.
In a statement to Entrackr, a ReshaMandi spokesperson confirmed the financial challenges and mentioned that the company has streamlined its operations and staff to focus on recovering pending receivables. Despite the turmoil, the spokesperson expressed optimism about overcoming the crisis and eventually getting back on track.
Earlier in June, ReshaMandi laid off 80% of its workforce due to its failure to secure Series B funding. The company had rapidly expanded across multiple verticals after securing significant funding in October 2021 but has since been forced to drastically reduce its operations. By the end of 2023, the company had reduced its workforce from 500 to around 100, with over 300 employees still awaiting their final dues. ReshaMandi, which raised over $40 million in equity funding and nearly Rs 300 crore in debt, now faces legal battles with creditors and vendors, with some considering filing for insolvency.
