The future of ReshaMandi, once a promising player in the textile supply chain industry, seems bleak as the company has reportedly laid off its entire workforce. According to sources close to the firm, the situation has deteriorated rapidly, with the company’s website remaining inaccessible for over a week, coinciding with the resignation of its auditor.
“It’s all over for ReshaMandi,” said an anonymous source. “The company has been unable to meet its financial obligations, including paying off liabilities and covering operational costs such as salaries for several months.”
Attempts by Team Theindiabizz to access ReshaMandi’s website since last Wednesday have been unsuccessful, signaling deeper operational issues.
The company has been embroiled in several corporate governance controversies, including allegations of revenue inflation and the issuance of fake invoices. These issues were flagged by its former auditor, Walker Chandiok & Co LLP, who resigned last month. According to regulatory filings accessed from the Registrar of Companies (RoC), the auditor cited the firm’s financial distress, downsizing, and its inability to complete the financial statements for FY23 as key reasons for their resignation. Notably, ReshaMandi owes Rs 14.16 lakh to the auditing firm for its services.
In response to these challenges, the company has appointed a new auditor, Suresh Kapoor & Associates, in late July. However, ReshaMandi’s financial woes have only worsened, with a series of high-profile exits, including the resignation of its chief financial officers.
In April 2023, former KPMG CFO Samadrita Chakravarty was brought in as the group CFO, only to resign in October, following her predecessor, Ritesh Kumar, who served as CFO from March 2022 to January 2023.
When approached for comments, a ReshaMandi spokesperson admitted that the company is undergoing financial difficulties. “ReshaMandi is facing some financial difficulties and has streamlined its staff, operations, and processes to focus on collecting its pending receivables from the market. We continue to believe in coming out of this situation strong and be able to get back on track soon,” the spokesperson said.
However, the company’s co-founder Mayank Tiwari did not address specific questions regarding the layoffs.
ReshaMandi, which raised over $50 million in funding—including a $30 million Series A round in October 2021 and $6.2 million in debt in November 2022—appeared to be on a growth trajectory. The company had even reported a target of Rs 1,900 crore in gross revenues for FY23. However, the reality of its operating market and inadequate processes seem to have caught up with the company, resulting in its current predicament.
The downfall of ReshaMandi serves as a cautionary tale for startups chasing growth solely for the sake of higher valuations. For ReshaMandi, the withdrawal of a potential investor, Temasek, seems to have been the final blow in a series of missteps.
