Kalaari Capital-backed Red.Health struggles to clear salaries

livemint.com:

Mint’s queries. “Our funding round is closed and we are awaiting money to be wired this week. Basis that, and to manage working capital we had given a choice to old employees to hold salaries back.

Please note that most of the salaries are already paid," Singh said, adding that the company will announce its fundraise in the next 15 days, which is going to be one of the largest Series B in India. The company did not give details on the investments being made in the hospital business and the quantum of funds to be raised in Series B round. According to multiple sources, the company has struggled to raise funding for an extended period and is likely facing issues to scale its business.

The founder, however, added that the company's business has doubled since September last year. Backed by investors like HealthQuad, Kalaari Capital and HealthXCapital among others, the company has raised a total funding of $22.6 million so far of which about $20 million came as Series A funding in January 2022. This was then termed as the largest Series A funding raised in the healthcare sector.

After hiring aggressively on the back of funding, the company had laid off about 800 employees since mid of last year, according to people in the know. Another person aware of the developments said Red.Health's chief business officer Shalabh Dang is set to leave the company in February. Singh did not address the question on his departure.

Data from Crediwatch shows that the number of employees fell from 1,718 in May to 1,011 in July last year. This situation mirrors a broader trend of startups, including Byju's, Dunzo and test prep company Exampur, delaying employee salary payments due to financial difficulties. Red.Health is an emergency response