Welcome to Startups Weekly, a fresh look at this week’s start and startup trends. To get this in your inbox, subscribe here.
With venture capital data coming out for the second quarter, it’s clear there’s a difference between how the startup market is trading and how it actually feels. Sure, capital has slowed down, but at least in the United States, the numbers aren’t as devastating as expected.
The numbers — which I’d recommend you check for yourself — provide a healthy dose of perspective during a difficult time in technology. It’s an odd dissonance: No matter how much capital there is, it’s clear that startups in all sectors and stages are still responding to macroeconomic concerns.
So this week’s layoff column is all about contextualizing that dissonance: We have new data, courtesy of Trueup, that gives us some color on who’s been hit hardest, both in terms of institutions and sectors, of the big tech layoffs. .
Trueup, a tech recruiting platform that tracks layoffs, claims that more than 117 unicorns have announced layoffs since the beginning of 2022. Of that cohort, the sector with the most layoffs is fintech, followed by crypto and real estate.
Notable fintech layoffs in recent weeks include Amount, which cut 18% of its workforce after a valuation of $1 billion just a year earlier, MainStreet, which cut 30% of its workforce in weeks before a potential recapitalization was implemented, On Deck, which scaled back 25% and its accelerator program, and Klarna, which cut 10% of its workforce before seeking funding at a lower valuation.
Layoffs are also not uncommon in the crypto world, as Coinbase and Gemini are also firing tech employees in response to the market.
As my colleague Mary Ann Azevedo reports, the recent downfall of fintech is in stark contrast to a busy 2021. Not surprisingly, the same industry that saw huge gains on venture capital is also being laid off. Growth at all costs, we hear from investors, comes at its own expense, especially when there is sudden pressure to shift towards profitability and focus.
Understanding which sectors have the highest rate of layoffs will give us a better understanding of where exactly to tighten the belt in a profitability-focused startup landscape. That said, things quickly get skewed: Fintech and crypto may have more, widely known layoffs due to the high innovation power that has poured in in recent years. Every startup these days is a fintech or web3 startup, so sheer volume could be why the scale back is so dramatic.
So that’s what I’m working on today. In the rest of this newsletter we will be discussing a creative twist on cap table management, The Roe reversal’s impact on technology and boilers. As always, you can support me by forwarding this newsletter to a friend or follow me on twitter or subscribe to my blog.
Offer of the week
AngelList Venture launches Stack Equity Management, a way for startups to organize and manage their cap tables natively within the platform. Stack Equity is a suite of products that companies use to raise, update, and buy shares of founders, employees, and investors. It is available today for US-based C Corporations.
Here’s why it’s important: The company is up against its biggest competitor, Carta, when it comes to cap table management pricing. Stack Equity Management charges companies based on team members, while Carta charges companies based on stakeholders, i.e. investors, on the cap table. We love some fintech drama!
Cauldrons, Bolts and Sour Markets: Welcome to Halloween in July
We had a creepy episode on Equity this week, as you can tell from the episode title. For me, by far the highlight of the episode was how a company went from suing a startup to a settlement by becoming a shareholder of the same company. Yaks.
Here’s why it’s important: The parent company of Forever21 has sued fintech Bolt, which is constantly struggling and shaking the board, for not delivering on its promises. Fast-forward to today, the same company settled with Bolt by becoming a shareholder in the startup. Talk about a quick turnaround. Here’s an excerpt from Mary Ann’s piece:
As for Bolt’s new cozy alliance with his previously frustrated client, Kuruvilla now suggests it’s all water under the bridge.
He noted that “both Forever21 and Lucky Brand have been using Bolt for a long time and will continue to use it in the future with this renewed partnership.”
“Both the ABG leadership and myself are working together to figure out how to expand it further and that comes directly from their CEO as he sets a very high bar on the kind of partners he wants to associate with,” added Kuruvilla . “It is clear that he has a strong belief in Bolt and our products. So we’re excited to take it to the next level.”
during the week
Seen on londonbusinessblog.com
It Sounds Like Elon Musk Is Still Trying To Get Out Of His Own Twitter Deal
Sequoia wants to invest $1 million in your idea and then teach you how to actually sell it
Twitter begins testing ‘CoTweets’ so users can co-author tweets
Former Theranos exec Sunny Balwani found guilty of fraud
MKBHD says yes to Google Glass, no to the metaverse
Seen on londonbusinessblog.com+
Roe reversal weighs heavily on emerging tech cities in red states
Is the US evading the downturn as the global venture capital market slows?
Pitch Deck Teardown: Enduring Planet’s $2.1 Million Seed Deck
7 Ways Investors Can Get Clarity While Conducting Technical Due Diligence
Crypto losses hit $670 million in the second quarter, up 52% from a year ago
Until next time,