“WayCool’s Chill: Inside the Agrifood Giant’s Dramatic Fall and Layoffs”

Startup Name: WayCool Foods

Founded: 2015

Business Model:
WayCool is a Chennai-based agrifood supply chain startup focused on streamlining the movement of agricultural products from farm to consumer. It expanded into branded consumer packaged goods (CPG) with labels like Madhuram, Kitchenji, and Freshey’s, and operated subsidiaries such as CensaNext and BrandNext. The company raised over $340 million from major investors and was last valued at around $700 million.

Current Status (as of mid-2025):
WayCool is facing a severe crisis, marked by:

• Three major rounds of layoffs within 12 months, including over 200 employees in July 2024, following earlier cuts of 300 (July 2023) and 70 (February 2024).

• Layoffs have affected staff across Chennai, Bengaluru, Hyderabad, and subsidiaries, shrinking the workforce from 2,300 in September 2022 to just over 500 by early 2025.

• Delayed salaries and vendor payments, with some employees and vendors reporting months of unpaid dues as client collections stalled.

• Failed fundraising attempts: Negotiations for a fresh $50 million round collapsed, and the company has relied on bridge rounds and debt to stay afloat.

• Mounting financial losses: FY23 losses widened by 117% to ₹3,856.9 crore, despite a 62% rise in operating revenue to ₹1,251.4 crore. Expenses nearly doubled year-over-year.

• Leadership exits: Co-founder Sanjay Dasari stepped down from day-to-day operations in December 2024, remaining only in an advisory role.

• Allegations of fake invoicing and fake orders surfaced, further damaging credibility and internal morale.

Outlook:
WayCool is in a precarious position:

• The company is undergoing major restructuring and downsizing in a last-ditch effort to reach profitability.

• It has exited multiple business lines and is focusing on branded products, which now account for 45% of revenue.

• However, with funding dried up, mounting debt, delayed payments, and a shrinking team, industry sources suggest a shutdown or major collapse is imminent unless a turnaround or acquisition occurs soon.

Learnings for Startups:

• Prioritize sustainable margins: Rapid growth in low-margin, high-expense sectors can be fatal without clear profitability.

• Maintain financial discipline: Avoid overextending on headcount and business lines without secured, recurring funding.

• Transparent stakeholder management: Delays in salaries and vendor payments erode trust and can trigger reputational crises.

• Leadership continuity: Founder and key leader exits during crises can accelerate decline.

• Internal controls: Allegations of fake invoicing highlight the need for robust governance as companies scale.

Summary Table

WayCool’s trajectory is a cautionary tale about the dangers of rapid expansion, thin margins, and over-reliance on external funding in the agrifood sector.