CredR, a two-wheeler marketplace backed by Omidyar Network and Eight Roads Ventures, has delayed September salaries and temporarily halted operations as it chases a $20 million funding round. The disruptions have raised fears of an imminent shutdown, employees and people familiar with the matter told Mint.
Two employees, speaking on condition of anonymity, confirmed the delay in salaries and said CredR’s offices have remained closed for over two weeks.
On 11 October, the company informed staff that the offices would be closed until 20 October, with leave adjusted against Diwali holidays. The closure was later extended to 27 October, but the offices did not reopen on 28 October as planned, and the staff has received no communication from management about a revised timeline, one of the employees cited earlier added.
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The other employee said that the variable component of their salaries had been withheld for several months. “Our emails inquiring about work and payments since the 21st have gone unanswered,” he said.
Fundraising push
Sasidhar Nandigam, co-founder at CredR, confirmed that September salaries have been delayed as part of a strategy to conserve cash flow. “Since the last two months, we have been lean on operations because of the seasonality part. We have just pushed the salaries to ensure that the cash flows are healthy for us,” Nandigam told Mint.
The company is actively pursuing a new funding round of over $20 million, though Nandigam did not disclose further details about investors or valuations. CredR has raised $40 million to date and is currently valued at $28 million, according to Tracxn.
Nandigam added that the company’s backup plan rests on completing regulatory filings in time. “Funding is through, and we are proceeding with regulatory filings. All this should settle down in a week’s time given there are four back-to-back bank holidays this week,” he said.
He attributed the closure of offices, stores, and warehouses over the past two weeks to preparations for a product launch. “Anytime we launch a product, we pause business for 2-3 weeks to allow for smooth migration, depending on how many stakeholders are involved, and then restart operations,” he explained.
While he did not disclose specifics about the product, Nandigam said it forms the core of the company’s pitch to new investors. He added that the current funding round was initially expected to close in May but was delayed due to adjustments in his equity stake.
“My stake was 2.5% and only increased to 5% in December last year. The new investors wanted me to have a higher stake,” he said. As of 2022, Nandigam’s equity was below 0.1%, according to Tracxn.
Existing investors Omdiyar Network, Eight Roads Ventures and Yamaha did not respond to Mint’s queries for comment.
Founded in 2015 by IIT-Bombay alumni Sumit Chhazed, Nikhil Jain, and Nittin Mittal, CredR initially focused on the sale of second-hand two-wheelers. All three founders have since moved on, according to their LinkedIn profiles. Nandigam joined as a co-founder in 2019.
“This is the second time this has happened. Around July 2022, we faced another disruption when the company had to vacate its office spaces in Pune. We had to work from CredR shops, cars, and open spaces like footpaths for about four months,” the second employee mentioned earlier said.
The company’s last funding of ₹16.17 crore ($2 million) came in 2022 through convertible debt from Yamaha Motor, though it remains unclear how long CredR has been seeking fresh capital.
CredR’s challenges reflect broader struggles in the sector. Beepcart, a direct competitor, has also laid off more than 100 employees since the start of 2024. Larger players in the used vehicle market, such as Spinny and Cars24, are grappling with steep losses, underscoring the sector’s financial pressures.
Financials and shrinking workforce
CredR’s revenue grew from ₹22 crore in FY22 to ₹34 crore in FY23, according to Traxcn. The company has not yet disclosed its FY24 financial.
The workforce has shrunk significantly over the past five years—from around 1,000 employees to fewer than 100 today. Nandigam acknowledged that 70-80 employees were laid off in March, though he emphasized that severance was provided, and no forced resignations occurred.
Bhaskar Majumdar, managing partner at Unicorn India Ventures, said that salary delays are becoming increasingly common in startups facing liquidity challenges. “If there are revenues, companies can explore traditional routes like invoice discounting. But if they rely solely on investor equity, it becomes a problem,” Majumdar noted.
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Raghav Dhoot, founder of Avyay Advisors, added that the payroll issues faced by CredR mirror a trend across both early-stage and more established startups. “Employees have the right to issue formal notices if delays persist, and if the situation remains unresolved, they can pursue legal remedies such as filing a civil suit,” Dhoot said.
