Simpl BNPL Startup Lays Off 100 Employees After RBI Halt

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Simpl BNPL Startup Lays Off 100 Employees after the Reserve Bank of India (RBI) cracked down on its operations, in what many insiders are calling a near-fatal blow to one of India’s most talked-about fintech brands. Once celebrated as the pioneer of seamless “buy-now-pay-later” payments, the Bengaluru-based startup is now reduced to just a skeletal crew.

On October 1, Simpl’s management broke the news to employees in a tense, company-wide meeting. Roughly half the workforce—around 100 people were told their roles no longer existed. From a team of about 220, only 50–60 employees will now remain, mostly handling payment collections and keeping basic operations running. The technology and product divisions, once considered Simpl’s pride, have been almost entirely gutted.

The reason? On September 25, the RBI ordered Simpl to stop its payment processing activities, saying the firm had been running a payment system without proper authorisation. This directive cut directly into its core business. Piling onto that, the Enforcement Directorate (ED) has alleged that Simpl misrepresented itself as an IT services company in order to raise ₹900 crore under India’s automatic foreign direct investment (FDI) route—funds it could not have legally secured if it had admitted it was in financial services.

This is not the first time Simpl has wielded the axe. In May 2024, it had already laid off 160–170 people. Over the last 18 months, more than 260 staff have lost jobs, painting a grim picture of a startup once tipped as the future of digital payments in India. Founded in 2016, Simpl had wooed over 26,000 merchants including BigBasket, Zomato, Crocs, and MakeMyTrip, and even raised $40 million in 2021 from global investors. But today, survival, not growth is its only focus.

1. Simpl BNPL Startup Lays Off 100 Employees After RBI Halt

When Simpl announced its latest round of layoffs, the move did not come across as just another “cost-cutting exercise.” Instead, it felt like an existential reshuffling. The once-buzzy fintech brand told employees on October 1 that around 100 of them would have to leave, just days after RBI froze its payments license.

The order effectively paralyzed the company’s backbone, its payment processing system. With no revenue engine running, Simpl has been left clutching at whatever it can salvage. By retaining only collections and operations, the message is clear: recover dues first, figure out survival later. Product innovation, engineering growth, and merchant tie-ups have all been shoved to the back seat.

2. Understanding Simpl’s Business Model

2.1 The Buy-Now-Pay-Later Proposition

At its heart, Simpl was never just a payments company. It was a trust machine. It bet on the idea that Indians, especially those without credit cards, deserved a frictionless checkout “order first, pay later.” You could buy dinner on Zomato, groceries on BigBasket, or shoes from Crocs without punching in OTPs every single time. One consolidated bill at the end of the cycle, and that was it.

To merchants, this wasn’t charity. Simpl promised higher conversion rates and reduced cart abandonment. It effectively said: “Let us handle the friction, you focus on selling.” For a while, it worked wonders.

2.2 Revenue Model

The company earned in two major ways. First, merchants paid a fee for every transaction completed on Simpl. Second, late-paying consumers were charged penalties, which added up significantly as volumes grew.

But here’s the catch: this model worked only if transaction volumes kept growing, repayments came in steadily, and regulators stayed silent. Once scrutiny mounted, the cracks became unavoidable.

3. Founders and Journey of Simpl

3.1 Early Days and Vision

Simpl was co-founded in 2016 by Nitya Sharma and Chaitra Chidanand, two people with a clear vision: digitizing the “informal trust” of cash transactions. You buy now, and you promise to settle later. In Indian markets, this principle is as old as the local kirana store. Simpl simply gave it a digital avatar.

3.2 Growth and Merchant Network

The company expanded rapidly. By partnering with over 26,000 merchants, it became the poster child of India’s BNPL boom. Think Zomato, MakeMyTrip, 1MG, and BigBasket, Simpl’s name popped up everywhere consumers spent online. For a brief moment, it looked unstoppable.

3.3 Funding Milestones

Money followed hype. In 2021, Simpl raised $40 million in Series B from marquee investors like Valar Ventures and IA Ventures. In total, over ₹900 crore was raised, fueling aggressive hiring and product launches. But aggressive expansion without tight compliance checks has a way of catching up.

4. Services and Products

4.1 Core BNPL Services

Simpl’s bread and butter was its one-tap checkout: buy instantly, no authentication fatigue, and settle later. Consumers loved it for its simplicity.

4.2 Additional Offerings

It wasn’t limited to e-commerce. The startup wove itself into grocery payments, utility bills, and food deliveries. At one point, Simpl was almost invisible in daily transactions precisely because it was everywhere.

5. Problems Simpl Aimed to Solve

5.1 Consumer Pain Points

For everyday Indian shoppers, the digital checkout experience is often far from smooth. While BNPL promised to make things easier, the reality highlighted several persistent pain points that Simpl aimed to address. These challenges weren’t just about convenience, they were about trust, access, and financial flexibility.

• Indians hate repeated OTPs and failed UPI attempts.
• Many don’t own credit cards.
• Multiple digital wallets confuse rather than simplify.

Simpl solved all that by offering one trusted bill, one trusted cycle.

5.2 Merchant Challenges

From the merchant’s side, the problems looked equally frustrating. Online businesses were battling high customer drop-offs and spiraling payment costs, which directly ate into their margins. Simpl tried to position itself as the partner that could solve these issues by making transactions smoother and stickier.

• High cart abandonment was crippling e-commerce.
• Gateway fees ate into margins.
• Loyalty was thin in cutthroat online markets.

For merchants, Simpl was a stickiness tool. Customers returned because paying was painless.

6. Regulatory and Legal Roadblocks

6.1 RBI’s Directive

On September 25, the RBI issued what can only be called a death note for Simpl’s core business. By declaring that Simpl was operating an unauthorized payment system, the regulator effectively yanked the ground out from under the startup.

6.2 Enforcement Directorate Probe

If that wasn’t enough, the ED accused Simpl of misclassifying itself as an IT services firm to attract foreign money. The allegation? Over ₹900 crore was raised under a false category, something that could invite criminal liability if proven.

6.3 Broader Regulatory Pressure

Let’s be clear: Simpl is not the only one under fire. India’s entire BNPL sector is under the scanner. RBI wants stronger checks, safer lending, and tighter consumer protection. Simpl just happened to be the poster child caught in the storm.

7. Competitors in the BNPL and Fintech Space

7.1 Direct Competitors

• ZestMoney – which itself is struggling under RBI’s gaze.
• LazyPay – still active but cautious.
• KreditBee – more focused on personal credit, but still in Simpl’s space.

7.2 Indirect Competitors

The elephant in the room isn’t another BNPL startup. It’s UPI giants like PhonePe, Google Pay, and Paytm. Why use a third-party BNPL when UPI is frictionless and free? Add credit cards with EMI options, and Simpl was squeezed from both sides.

8. Industry Growth Trends

8.1 Rise of BNPL in India

At its peak, the BNPL sector in India was projected to be worth $40 billion by 2026. Young professionals loved it, merchants embraced it, and investors poured in capital.

8.2 Regulatory Reset

But regulators saw a looming credit bubble. With unsecured lending rising and repayment defaults quietly creeping up, RBI stepped in.

8.3 Global Perspective

This isn’t just an India story. Global BNPL darlings like Klarna in Sweden and Afterpay in Australia have also seen valuations collapse as regulators tighten rules.

9. Previous Layoffs and Financial Struggles

9.1 Earlier Downsizing

Back in May 2024, Simpl had already trimmed 160–170 roles, especially in engineering and product teams. It was a warning sign that the cash burn was unsustainable.

9.2 Cash Burn and Slow Growth

Industry chatter suggested Simpl’s monthly cash burn was eye-watering. Coupled with slowing user growth and drying venture money, the company was heading toward a cliff.

10. Current Survival Strategy

Simpl’s survival playbook now looks brutally simple: keep collections alive. With only collections and operations staff retained, the company is prioritizing debt recovery over everything else.

But let’s be honest, without product teams, merchant expansion, or consumer trust, this is life support, not revival. Unless RBI relents or new licenses are granted, Simpl’s “future” may already be past tense.

11. Learning for Startups and Entrepreneurs

The Simpl saga is a crash course in what not to do.

• Don’t ignore regulators. In finance, compliance is survival.
• Don’t burn cash chasing growth. Without profits, hype doesn’t last.
• Don’t misclassify your business to investors. Transparency is non-negotiable.
• Always have a plan B. Simpl bet entirely on BNPL and paid the price.

For entrepreneurs, the message is clear: speed is great, but alignment with law and sustainability is greater.

About Foundlanes

At Foundlanes, we track stories where innovation collides with reality. Simpl’s downfall is not just about a single fintech—it’s about what happens when ambition runs faster than regulation. Our platform covers founder journeys, venture capital moves, industry shifts, and the evolving startup ecosystem in India and abroad. Whether it’s fintech hiccups, AI breakthroughs, or clean energy wins, The Startups News delivers context that entrepreneurs, investors, and readers can trust.