Top B-schools are doing background checks on startups

Placements for the 2023 batch have started, thronged by legacy firms and big tech companies as well as startups. Photo: Mint
Placements for the 2023 batch have started, thronged by legacy firms and big tech companies as well as startups. Photo: Mint


Top engineering and business schools are setting conditions for allowing startup recruiters on campuses

MUMBAI : Top engineering and business schools are taking a hard look at the startups turning up for campus recruitments following layoffs in the sector, placement heads at multiple institutions said. The schools are doing background checks on the startups and setting conditions for allowing them into campuses.

Some of the premier colleges said they would insist that the new startups first hire during summer internships and come for campus placements later to ensure their need for campus recruits is more than a hiring milestone.

“We are worried about the startup layoffs and do not want to be in a position where they withdraw offers. The placement teams are conducting more-than-usual due diligence on the financials of the companies who are coming in for placements," the placement head of one of the older National Institutes of Technology (NITs) said on the condition of anonymity. Placements for the 2023 batch have started, thronged by legacy firms, big tech companies as well as startups.

“This time, we are looking at the funds raised, the number of layoffs the company had and in which segments," the placement head added. NIT placements start in August, while that at the Indian Institutes of Technology (IITs) start in December.

Startup layoffs have also made the Indian Institutes of Management (IIMs) adopt a more rigorous procedure.

“New startups will be allowed if they have taken students for summer internships. There is also a cap that the new startups have to take at least five students from the campus, which shows their keenness for recruitment from the campus," said the placement head of one of the older IIMs.

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IIM placements start in cohorts beginning February-March. Over the past decade, startups and e-commerce companies have competed with legacy firms, big tech, banks and consulting majors in recruiting students with high salaries, senior designations and stock options.

The placement head of an IIM, which has seen more than two decades of placements, said the institution would cross-check with alumni on the position of these companies. “Our alumni base is very strong and holds senior posts in companies. We will check with them on the status of the companies," the placement head said.

He said the newer IIMs have more to worry about since many new companies prefer the younger IIMs, where they can pick up more students at lower salaries and, at the same time, meet their management hiring targets.

Multiple venture capital-backed startups have laid off over 11,000 employees since the beginning of this year. After the pandemic-fuelled digitalization in the past two years, the hiring frenzy has cooled as many cash-guzzling startups saw finances deplete, with investors sharpening their focus on profitability.

Layoffs have been most prominent in the edtech space. Pink slips were seen even at Toppr and Whitehat Jr, companies acquired by edtech decacorn Byju’s.

Edtech unicorns such as Unacademy and Vedantu have also laid off staff over the past months. LEAD, which joined the unicorn club just earlier in January after raising $100 million, was the latest edtech startup to lay off staff earlier this month.

Early-stage edtech startups such as Lido Learning have also retrenched staff, while learning platform Udayy has shut down its operations and laid off the entire workforce.

Outside edtech, startups such as Meesho, Furlenco, Cars24, MFine, MPL, OkCredit, CitiMall, and Fraazo also have let go of their employees. Notably, most of these startups had raised significant funding last year.

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