Smallcase, a fintech startup backed by Sequoia, has kicked out some employees as part of a restructuring effort. The company confirmed this information in a statement to Business Today.

As per the company's statement, the staff reductions were deemed "normal course of business. Over the last 3 months, 4 per cent (15 members) of the team has been impacted as part of the normal course of business," the statement read. 

However, sources claim that the company is minimising the significance of this event. "They have been silently laying off employees from past month or so after putting them on PIP. It is not business as usual; their losses are growing. The company is burning money in marketing and employees are having to face the heat. They are not prioritising employees," revealed a source according to BT report. 

The company's losses for FY 2021-22, according to their regulatory filing with the Ministry of Corporate Affairs, are at Rs 76.2 crore. This figure represents a 196% increase YoY from FY 2020-21, where losses were at Rs 28.3 crores.

According to the regulatory filings, the losses were primarily attributed to marketing and promotional expenses. Smallcase's spending on marketing and promotions amounted to Rs 51 crore in FY 2021-22, which accounted for 43% of their total expenses. In contrast, their expenditure for the same category was only Rs 9.8 crores in FY 2020-21, which is less than a fifth of what they spent in FY 2021-22.

A different source stated that the Performance Improvement Program (PIP) was not in effect during 2021-22, explaining that "it was alright during the bull market of 2021-22, when the company was expanding, so the PIP was not in use. However, the PIP has now been activated all of a sudden."

Smallcase, a fintech startup founded in 2016 by IIT alumni Vasanth Kamath, Anugrah Shrivastava, and Rohan Gupta, has a valuation of $200 million based on their latest funding round in August 2021. 

This Series C funding round, which was led by Faering Capital, raised $40 million for the Sequoia-backed company. Smallcase provides retail investors the opportunity to invest in portfolios composed of broker-partner stocks and exchange-traded funds (ETFs).