Welcome in The exchange! If you received this in your inbox, thank you for your registration and vote of confidence. If you are reading this as a post on our site, please register here so you can get it directly in future. Each week, I’ll take a look at the hottest fintech news from the previous week. This will include everything from funding rounds to trends to analysis of a specific space to hot opinions about a specific company or phenomenon. There’s a lot of fintech news, and it’s my job to keep up with it — and understand it — so you can stay informed. — Mary Ann
Wow, I’m downloading for a week and getting the hell back into the fintech world.
Unfortunately, it felt like we were getting layoff after layoff news.
I’ll try to collect as many of them as possible here:
- Chime has confirmed it is laying off 12% of its staff. That equates to about 160 people. According to an internal memo obtained by TechCrunch, Chime co-founder Chris Britt said the move is one of many that will help the company thrive “regardless of market conditions.” In the memo, Britt said he and co-founder Ryan King are realigning marketing spend, reducing the number of contractors, adjusting workspace needs and renegotiating vendor contractors.
- Opendoor has announced that it is laying off 18% of its staff. That’s about 500 people. Opendoor co-founder and CEO Eric Wu said his company, a publicly traded fintech real estate company, is navigating “one of the most challenging real estate markets in 40 years.”
- Chargebee has laid off about 10% of its staff. As reported by Jagmeet on November 2, “Chargebee, backed by investors including Tiger Global and Sequoia Capital India, laid off around 10% of its staff in a ‘reorganization’ effort due to ongoing global macroeconomic challenges and rising operating debt. The Chennai- and San Francisco-based startup, which offers billing, subscription, revenue and compliance management solutions, confirmed to TechCrunch that the update affected 142 employees.”
- Stripe is laying off 14% of its staff. As reported by gender“Stripe announced it is laying off 14% of its workforce, affecting about 1,120 of the fintech giant’s 8,000 employees.” In a note posted online, Stripe CEO Patrick Collison relayed a familiar narrative regarding the reasons for the latest layoffs: a large hiring, driven by the world’s pandemic-induced shift to e-commerce, a significant period of growth and then an economic downturn weighed down by inflation, higher interest rates and other macroeconomic challenges.
- Danish startup Pleo may lay off 15% of its workforce. Jeppe Rindom, co-founder and CEO of Pleo – less than a year ago raised $200 million at a $4.7 billion valuation — revealed that the company’s new strategy will affects 15% of its roles. He added that “up to 150 of our colleagues may have to leave”. Pleo is a developer of expense management tools aimed at small and medium-sized businesses to enable them to issue corporate cards and better manage how employees spend money.
- Credit Karma, now a subsidiary of Intuit, “decided to pause nearly all hiring.” That’s according to an internal email sent to employees by Chief People Officer Colleen McCreary. McCreary pointed to “revenue challenges due to the uncertain environment.” This was repeated in Intuit’s fourth quarter earnings call, during which the company shared on Nov. 1 that “all Credit Karma verticals have been negatively impacted by macro uncertainty. Credit Karma experienced further deterioration in these verticals in the last few weeks of the first quarter.”
- Remote online notary services supplier Notary reduces its team by 60 people. A spokesperson told me via email that “the reorganization affected nearly all teams and the decision was in service of the larger strategy we are pursuing at Notarize and will allow us to move faster to best serve our customers.” The spokesperson added that in September a small team focused on real estate was laid off in response to both the change in strategy and a “dramatic drop in demand from the specific clients they served.” Following are the latest cuts larger layoff in June which affected 110 people. Before this reduction, Notarize had about 440 employees. It currently employs 250 people in the United States.
I wrote this newsletter on November 3rd because I’m going on a trip to celebrate my 20th wedding anniversary, so it’s possible that more layoffs may have happened between then and now. 🙁 What this means for the wider world of fintech is still unclear, but when well-funded companies like Chime, Stripe, and Pleo are laying off staff, it’s no doubt sobering for all players – big or small – in the space.
Special thanks to TC Senior Reporter and a very nice person Kyle Wiggers for helping me map out the Weekly News and the Funding and M&A sections below so I can go offline and pack for my trip!
Jeevesthe fintech startup that recently raised $180 million at a $2.1 billion valuation, told TechCrunch via email that it has launched a service called Jeeves Pay, which bills itself as a “credit-backed business payments solution” for enterprise customers. At a high level, Jeeves Pay allows customers to use their existing line of credit to send remittances or pay suppliers, seemingly solving the problem of having to rely on cash or revenue to fund local and cross-border payments to businesses and suppliers. Jeeves Pay is now available to all Jeeves customers “where permitted by applicable local laws and regulations,” the company says.
Brex sees startups as one of the key avenues for growth in the corporate card and expense management market. To this end, the company on Wednesday announced partnering with Techstars to extend Brex’s services to companies within the accelerator, following similar tie-ups with Y Combinator and AngelList. During the accelerator, Techstars participants will receive a Brex platform support team, access to exclusive Brex events, and free use of Brex’s Pry financial forecasting platform. In an interview with TechCrunch, Brex CEO and co-founder Henrique Dubugras described the move as a play to attract customers.
At Disrupt, he interviewed TechCrunch of Brax Dubugras on stage for the company’s recent shift in strategy, which includes a stronger focus on software and the enterprise. A piece for TC+ reveals the highlights of the conversation, including why Brex decided to stop serving businesses funded outside of the venture capital structure and the implications of the company’s layoffs earlier this year.
Also at Disrupt, Ramp CEO Eric Gliman, Airbase CEO Tejo Cote, and Anthemis partner Ruth Fox Blader participated in a roundtable discussion on competition in the increasingly crowded cost management space—a space that, it’s worth noting, is appreciated to cost tens of billions of dollars. Gliman and Côté shared how they work to preserve capital, while Blader offered some of the advice he gives his portfolio companies. Our summary of TC+ has accents.
How can finance-focused proptech startups survive the downturn? In a TC+ exclusive, we asked three seasoned investors to give their perspectives. One of the main takeaways: The chances of survival are higher for proptech startups that allow users to partially invest in properties and increase access for those looking for a rental approach. Other: Companies that help others get through hard times seem to be in high demand.
Are landlords and tenants finally ready to ditch paper checks? JPMorgan Chase bet they are. The bank this week launched a pilot platform for property owners and managers that automates the invoicing and receipt of online rent payments. The market is huge—JPMorgan estimates that more than 100 million Americans pay a total of $500 billion a year in rent to 12 million property owners—but convincing landlords to ditch checks and money orders won’t be easy. Only 22% of rent payments today are made digitally, according to JPMorgan.
And other news
Ramp has announced a new global reimbursement feature so that its clients can pay global employees in more than 175 countries and 80 currencies.
Digital home buying platform Prevu acquires Reali’s mortgage technologya real estate technology company that announced earlier this year that it was shutting down after raising $100 million in 2021.
Financing and M&A
Seen on TechCrunch
That’s it from me for this week. Thanks again for reading!! See you next time, hopefully with more inspiring news. xoxo Mary Ann