Red.Health, an ambulance aggregator backed by Kalaari Capital, has partially delayed January salaries for its staff, with only 50% disbursed so far, according to people aware of the matter.
The company had paid half of the wages to paramedics and employees on 9 February, according to a current employee. There has been no intimation of when the remaining salary will be credited.
December salary was delayed by two days and disbursed on 3 January with communication over email, said this person, adding there has been no mail this time. “All the communication is happening over calls, where the HR is saying that things aren’t good right now and the company is waiting for funding,” the person said.
“Given the nature of our business, we had to launch three big hospitals this month and had forward investments to be made. This meant prioritising those launches over paying everyone’s salaries on the first (of January),” Prabhdeep Singh, founder and CEO Red.Health said in response to Mint’s queries.
“Our funding round is closed and we are awaiting money to be wired this week. Basis that, and to manage working capital we had given a choice to old employees to hold salaries back. Please note that most of the salaries are already paid,” Singh said, adding that the company will announce its fundraise in the next 15 days, which is going to be one of the largest Series B in India.
The company did not give details on the investments being made in the hospital business and the quantum of funds to be raised in Series B round.
According to multiple sources, the company has struggled to raise funding for an extended period and is likely facing issues to scale its business. The founder, however, added that the company’s business has doubled since September last year.
Backed by investors like HealthQuad, Kalaari Capital and HealthXCapital among others, the company has raised a total funding of $22.6 million so far of which about $20 million came as Series A funding in January 2022. This was then termed as the largest Series A funding raised in the healthcare sector.
After hiring aggressively on the back of funding, the company had laid off about 800 employees since mid of last year, according to people in the know.
Another person aware of the developments said Red.Health’s chief business officer Shalabh Dang is set to leave the company in February. Singh did not address the question on his departure.
Data from Crediwatch shows that the number of employees fell from 1,718 in May to 1,011 in July last year.
This situation mirrors a broader trend of startups, including Byju’s, Dunzo and test prep company Exampur, delaying employee salary payments due to financial difficulties.
Red.Health is an emergency response platform that aggregates ambulances – which includes its fleet and partnerships with local ambulance vendors – and claims a response time of eight minutes.
The company posted a revenue of ₹46 crore and a loss of ₹1.4 crore in FY22.