Startup Originals Team
Bengaluru-based buy-now-pay-later (BNPL) firm Simpl has downsized sharply, laying off about 100 employees amid regulatory pressure. The move follows an order from the Reserve Bank of India (RBI) to suspend Simpl’s payment, clearing, and settlement services. What remains is a skeletal team chiefly focused on collections and operations.
Workforce Cut: From 220 to 50–60 Staff:
- Simpl had around 220 employees before the shakeup.
- In an internal meeting held on October 1, the company informed teams that nearly 100 staff across various departments would be laid off.
- Post-restructuring, only 50-60 employees will remain, primarily handling collections and operational tasks.
- The cuts affect core units such as product development, engineering, sales, and marketing.
Regulatory Trigger: RBI’s Suspension Order
- On September 25, 2025, the RBI ordered Simpl to immediately cease all payment, settlement, and clearing activities, asserting that the startup was running a payment system without necessary authorisation under the Payment and Settlement Systems (PSS) Act.
- According to the RBI, Simpl’s business structure violated regulatory norms as it operated payment services without valid licensing.
Legal Heat: ED Alleges FDI Violations
- The Enforcement Directorate (ED) has filed a case alleging Simpl misclassified itself as an IT services firm to raise more than ₹900 crore through the automatic route.
- ED claims that although Simpl’s business is effectively in financial services, it bypassed stricter FDI rules by labeling itself as an “IT services” company.
Background & Previous Struggles:
- Founded in 2015, Simpl built a BNPL infrastructure across more than 26,000 merchants, including names like Zomato, MakeMyTrip, BigBasket, 1mg, and Crocs.
- In earlier funding rounds, Simpl had secured $40 million (Series B, 2021) backed by Valar Ventures and IA Ventures.
- The company has been under stress: in May 2024, it cut 160–170 employees, especially in engineering and product teams, to manage costs.
- Observers interpret the current downsizing as a cash conservation move aimed at survival while regulatory issues are resolved.
What’s Next for Simpl?
- With most of its core product and technology teams gone, Simpl’s ability to innovate or relaunch its services is severely constrained.
- To return to full operations, Simpl must secure regulatory approvals, resolve ED’s FDI allegations, and rebuild credibility.
- The company’s survival hinges on its ability to navigate India’s tighter regulation of digital lending and fintech operations.
