In the wake of RBI clampdown, buy now pay later (BNPL) startup Simpl has laid off around 80 employees. While the layoffs happened across functions, the sales and marketing team were the most impacted.
Simpl’s founder and CEO Nitya Sharma told Inc42 that the startup had to undertake the restructuring activity to conserve its capital moving forward. Money Control was the first to report the development.
The layoffs come days after the apex bank told the BNPL startup to stop all payment operations as it was operating without regulatory licences.
“The RBI has asked us to pause our payments business until we receive the necessary authorisation. We are closely working with the regulator, and once approvals are in place, we intend to restart operations and bring our people back,” Sharma said.
While the RBI action has effectively led to its halting BNPL offering, the startup continues to operate its app while the payments side remains paused. However, it is important to note that Simpl’s main revenue driver was its BNPL offering.
Despite the regulatory action, Sharma emphasised that the startup remains profitable with a decent amount of runway and is optimistic about its sustenance.
“We have a healthy runway and are already profitable, which gives us the flexibility to focus on working with the regulator without worrying about short-term survival,” Sharma said.
For context, the RBI directed the Bengaluru-based fintech startup to immediately halt “payment, clearing, and settlement” activities as it was operating without authorisation under the Payment and Settlement Systems (PSS) Act, 2007.
The order followed an Enforcement Directorate (ED) complaint accusing Simpl of violating India’s foreign direct investment (FDI) norms. Investigators claimed the company misclassified itself as an IT services provider to raise over INR 900 Cr under the automatic route, even though its core business fell under financial services, which requires prior government approval.
Founded in 2015, Simpl powers checkouts for over 26,000 merchants including Zomato, BigBasket, Rapido and 1MG. It claims more than 7 Mn users and has raised $83 Mn so far from investors such as Valar Ventures, IA Ventures, Green Visor Capital and FJ Labs.
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