Semester II

(Subject)
EFFECTIVE COMMUNICATION

Submitted to Dr Gaurav Mathur

NMIMS School of Commerce
BBA
TEAM MEMBERS:

Case prepared by-

SE STUDY-GROUP 1(BBA DIVISION E)
KHUSHI SHAH-74022120937
DITI PATIL-74022120966

UNSUBSCRIBING
UNDINING
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 SR.NO TOPIC PAGE NO.

1 INTRODUCTION 2

2 LITERATURE REVIEW 2

CASE STUDY

4 INTRODUCTION 2

5 BACKGROUND 3

6 PRE-CRISIS 3

7 DURING-CRISIS 4

8 POST-CRISIS 4

9 CONCLUSION 5

10 BIBLIOGRAPHY 5

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 INTRODUCTION

The following case study has been made to make us recognize the problems faced by budding
start-ups head by young entrepreneurs and realize the importance of not having a well-
structured solution at the time of a crisis. The objective of the following case study is to look
over and analyse the problems faced by the company during organisational crisis and how
they handled the situation effectively.

LITERATURE REVIEW

Crisis is any event which occurs uninformed or sometimes informed which leads to unstable
conditions affecting an individual or all of society. It implies a situation where in an
immediate solution needs to be taken in order to come out of the crisis effectively. In
situations like organizational crisis, the company has wronged its employees or consumers.
The company indirectly just uses their consumers and employees as a mean of benefiting the
company.
Organisational structure determines how information flows between levels within an
organisation.

CASE STUDY

INTRODUCTION-
Not a dragged out story but a one with numerous twists and turns. Undining received massive
funding in the start which boosted their morale and ended up hiring a huge amount of
employees. The company was doing very well until September 2015, that’s when things
started going downhill.
As the business observed a rise in the number of orders per day, Undining went on a hiring
spree to achieve their targets and went from a peak of about 1100 employees, to just 200.
Despite support from big investors, Undining ran into operational troubles. They also spent
lakhs of rupees in advertising and other marketing strategies for customer acquisition and
money was running out since the Investors also stopped funding the company and so the co-
founders had to announce the company’s merger.

BACKGROUND-

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Established in 2014 by five IIT alumni, Undining is a Mumbai based private company which
develops location based mobile application for ordering food. The company provides an
android application that enables users to find restaurants and order food. It also helps the
users to detect their location and find restaurants in their vicinity. The company’s aim is to
provide best and easy experience to their customers while ordering food. They also have
multiple tie ups with restaurants across the states.
The company was founded by Taran Khanna, Harsh Mahar, Shubham Mishra and Gagan
Chavan who were all very young entrepreneurs. The company’s turnover- Rs 44cr. i Undining
stood strong because of its funding from sources like Sequoia, Matrix Capital and Nexus
Venture Partners. The total capital investment raised by these young entrepreneurs was INR
120 crores.

PRE-CRISIS-
During September 2015, Undining went from a peak of about 1100 employees, to just 200.
Harsh was the young co-founder and CEO of Undining. His primary job was fundraising and
became a fundamental in the spectacular growth of their start-up, which led him to over hire
employees for the company. The other co-founders managed responsibilities like operations,
finance, marketing, human resource, and technology. Although there was an increase in the
number of orders, Undining app was free for all its users.
The same year in which the company was formed Undining raised 100 crores from their
second round of funding for expanding their company. Undining had a plethora of restaurants
listed on their sites, which led to about 2000 orders on a daily basis. Since there were a lot of
players in the market, the company wanted to do something unique to survive in the
competition and hence they launched another app called ‘Undining Homemade’ which
provided access to food from home chefs.
Harsh Mahar in early 2015 quoted, “There are a lot of big and smaller players, and only the
really different and unique platforms will survive. We are scaling up our operations and I am
confident we could create something different than the others. We concentrate on having a
model which is not just beneficial to the consumers but also the restaurants and helps the
ecosystem of the country”

DURING CRISIS-
Undining collapsed in a way, no one imagined it to. But how did it end up here?
The 2 co-founders, Harsh and Tanuj, along with the other three members of the core team
were young and lacked experience. All the founders and co-founders were between the age of
22 to 24 years when the company received funding and blew up. Initially they had 600
employees and multiple cities to look over, but didn’t have enough knowledge about the
industry.
While most of their focus was on the product and the tech, it should have shifted to
operations once the company started to ascend. But, that didn’t happen.
As they started to receive fundings, they thought spending money was the best plan to scale
their business which led to over hiring and over expanding. The organisational structure

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wasn’t in place since no one was there in the top management level, to keep up. Hence, it was
important for them to know where exactly their company needed improvement in the start
rather than go for growth.
The trespassing of over-recruitment is what led to its abolishment. Though it fired 300
employees in September 2015ii, the already hidden misfortune continued to haunt. It triggered
the nerves of one the employees so she lashed out asking Harsh Mahar, “How much money
did you save when you fired me?”. Mahar’s only reply was his silence. Due to the over-
hiring, company’s burn shoot up to 8-10 crore a month
In November 2015, Undining initiated its second round of cuts. And that was the second
mistake towards its downfall.
The founders even made an update which gave an idea to the users about the current day’s
dish. The idea did not work keeping the technicality as hardly any artificial intelligence was
used.
Undining made fourth mistake in the end of 2015 when it hired a chief technology officer for
Rs 1.5 crores a year and a joining bonus of Rs 50 lakhs.

Undining came up with a new model of food aggregation like its industry competitor Grofers.
The costing skyrocketed as it had to pay for the logistics of gathering the food from various
restaurants and thus Homemade, the only division of Undining then working broke and
dissolved.

POST CRISIS-
Undining had to shut down its operations in all cities except for Mumbai due to negative
profit margin, high costs of delivery and customer acquisition.
The CEO of Undining Harsh Mahar, the other co-founders and the investors were advised to
valuation audit which suggested that the company was going to be Zomato as Sequoia. Ola
had been an interest in the eyes of Mahar, as told by a few former employees. But none of
this was confirmed or backed by any of the founders.
Later, as suggested in the reports, it was suggested in a few reports that the company
Undining maybe in talks for an all-stock deal with Roadrunnr. The new merged company
now known as Runnr itself was facing operational problems. It currently operates in
Bangalore and Mumbai. Due to the high operational expenses, Runnr continues to fight for its
existence in a market with existing strong players like Zomato and Swiggy.

The founders split the company’s shares among themselves and parted their ways.

CONCLUSION

"Inexperience leaders are quick to lead before knowing anything about the people
they intend to lead. But mature leaders listen, learn and then lead " - John C.
Maxwell

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Thus the Mumbai-based food tech company failed as a start-up due to operational crisis like
over-hiring, over-funding, excessive cash-burn, poor leadership and delivery strategy, lack of
use of technology and over-saturated market.
There are many start-ups out there that had to withdraw on their midway. The rise and fall of
Undining set a lesson to be learnt for the Indian start-up community.

BIBLIOGRAPHY
https://techcrunch.com
https://techstory.in

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i
www.businessinsider.in

ii
www.medium.com