Toothsi lays off 20-30 employees due to a funding crunch

The dental technology startup Toothsi counts prominent celebrities such as cricketer Virat Kohli and actor Anushka Sharma as brand ambassadors, and has laid off 20 to 30 employees in an effort to extend its runway, according to sources familiar with the situation. It is battling to close a fresh funding round, as well.

The company raised $40 million in May 2022 from a number of investors, including veteran banker Aditya Puri, Eight Roads Ventures, Paramark, and IIFL. Earlier this year, it also raised $9 million in a venture debt round from Stride Ventures. It had previously raised $25 million in two rounds in 2021.

In 2018, orthodontists Arpi Mehta, Pravin Shetty, Manjul Jain, and Anirudh Kale founded a company that offers customers clear aligners instead of conventional braces. The company also has a sister brand called Skinnsi, which provides at-home laser-assisted cosmetology. The company merged Toothsi and Skinnsi under a new brand called MakeO in September 2022.

With funding taps down to a trickle, Toothsi is the latest startup to lay off employees in an attempt to cut costs and target profitability. Since the beginning of 2022, close to 91 Indian startups have laid off close to 24,500 employees.

Toothsi's expenses increased six-fold from Rs 43.8 crore in FY21 to Rs 263.4 crore in FY22. Employee benefit expenses accounted for approximately 27 percent of total expenses, totaling Rs 72.14 crore. At Rs 66.97 crore, advertisement and promotion costs were the second largest expense category.