Dukan.pk, an e-commerce startup that lets anyone with a smartphone build a web store, has laid off about 25 per cent of its workforce as startups across the globe adopt austerity measures due to a drying up of VC funding.
According to initial reports, Dukan.pk had been shut down completely but CEO Monis Rahman confirmed to Profit that the startup was very much operational and about 25 per cent workforce had been laid off, as the startup focuses on achieving profitability and decreasing reliance on VC funding.
Dukan.pk’s website is still operational, which wouldn’t have been the case if the startup had shut down completely. “Shutting down is not an option for us. Ever,” Monis told Profit in a WhatsApp message.
The total number of employees and how much the 25 per cent adds up to was not disclosed to us. However, according to Dukan.pk’s Linkedin page, it has about 51-200 employees, with 83 active employees on Linkedin.
Assuming a headcount of 100+ employees, over 25 employees would have been asked to depart. Some of the employees were asked not to show up for work from the very next day.
According to CEO Rahman, “All affected colleagues were asked to serve their notice period, except those who were on probation, terminated with cause, or those for whom we waived the notice period because they weren’t required for handovers.”
“These are exceptionally challenging times for startups and the economy. Extraordinary and sometimes painful steps need to, unfortunately, be taken during downturns like these,” he adds.
Dukan.pk layoffs come three days after Pakistan’s startup ecosystem poster-child Airlift announced shutting down its operations completely as VC funding dry up stings startups across the globe. Earlier, Airlift announced laying off 31% of its workforce in a bid to increase its runway amid fundraising woes.
Startups like Bykea, Truck It In, Retailo, and Tajir also discretely laid off employees as capital becomes scarce and startups are forced to adopt austerity measures to become sustainable. Startups have been criticised for adopting unsustainable models, led up by discount-oriented growth, extravagant perks for employees, for instance in the case of Airlift, and salaries and perhaps even overstaffing, on the back of abundant VC funds.
As VC funds dry out, however, startups are being forced to bring corrections to their models and are under pressure to make them sustainable. Dukan’s layoffs are part of the eCommerce startup’s efforts to extend its cash runway as much as possible, or at least until Dukan achieves profitability.
“We’ve seen strong growth on the revenue side and confidently expect to reach profitability within the next 3 months with our reduced burn rate,” Monis says.
Founded in February 2021 by Pakistani tech industry veteran Monis Rahman who previously founded Rozee.pk, Dukan.pk is a digital commerce, payments, and leading ecosystem for small businesses and their supply chains.
The startup had seemingly been on an impressive growth trajectory. According to a press release published on August 3, 2021, the startup announced having onboarded 100,000 small businesses in Pakistan that built their e-commerce stores using Dukan.pk mobile app, only five months after starting operations. In October, Dukan.pk claimed that the web stores had reached the 200,000 mark, doubling in two months.
The startup has not publicly announced closing a funding round but was in the process of raising a round back in October 2021.