Merger and acquisition are executed by large companies to plug missing pieces, kill competition and get a hold on talents. While ‘killing competition’ part has been a driving factor for a majority of M&A in Indian startups, some also done with the motive of acquiring relevant talent.
To strengthen its team across functions, Hike had acquired two startups – InstaLively and Creo last year.
Both companies were acquired in June and August last year. However, the Kavin Bharti-led instant messaging app has fired about 75 employees. A majority of these employees were from functions including finance, human resources and accounting and technology.
The employees who are part of ongoing retrenchment will get minimum of two months salary in a severance package. Notably, most of the fired employees are from the aforementioned acquired startups.
InstaLively platform helps broadcast events live and was focussed on instant video/audio digitisation on low 3G bandwidths using just a mobile app. It was cost-effective for an enterprise to create/broadcast content from any location.
Meanwhile, Hike had acquired Creo for an undisclosed amount primarily for technology IP and talents. The Bengaluru-based firm had developed an HDMI media streaming device – Teewee.
Of late, there are many venture-funded companies who have been downsizing team to control burn-rate. Tiger Global-backed ShopClues had fired about 50 employees in March this year while handyman service marketplace Housejoy had asked 40 members to resign from the company this month.
Amazon India also fired about 60 employees from its recruitment team.
Currently, Hike claims to have over 100 million users through its revenue has gone down in recent years. The company has over 350 employees at two offices in Delhi and Bengaluru.
Enabling easier discovery and control while connecting with others, the Gurugram-based company also had launched ‘Hike ID’, a unique identifier that lets users chat without sharing their mobile numbers.
The development was first reported by ET.