Welcome to The Switch! If you received this in your inbox, thank you for signing up and trusting us. If you read this as a post on our site, please sign up here so that you can receive it immediately in the future. Every week I watch the hottest fintech news from the past week. This includes everything from funding rounds to trends to an analysis of a particular space to hot takes on a particular company or phenomenon. There’s a lot of fintech news out there and it’s my job to stay up to date – and understand it – so you stay informed. — Mary Ann
Wow, I’m taking a week off and coming back to all hell breaking loose in the fintech world.
Unfortunately it felt like we were getting news of layoff after layoff.
I’ll try to collect as many as possible here:
- Chime confirmed it is letting 12% of its employees go. This corresponds to about 160 people. According to an internal memo obtained by londonbusinessblog.com, Chime co-founder Chris Britt said the move was one of several that would help the company prosper “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 contractors.
- Opendoor announced it would lay off 18% of its staff. This is about 500 people. Eric Wu, co-founder and CEO of Opendoor, said his company, a publicly traded real estate fintech, was moving in “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 Nov. 2, “Chargebee, backed by major investors including Tiger Global and Sequoia Capital India, laid off approximately 10% of its workforce in a ‘reorganization’ effort due to ongoing global macroeconomic challenges and growing operating debt. The startup, headquartered in Chennai and San Francisco, which provides billing, subscription, revenue and compliance solutions, confirmed to londonbusinessblog.com that the update impacted 142 employees.”
- Stripe lays off 14% of its staff. As reported by Paul“Stripe has announced it will lay off 14% of its employees, affecting approximately 1,120 of the fintech giant’s 8,000 employees.” In a memo published online, Stripe CEO Patrick Collison shared a well-known story about the reasons behind the latest budget cuts: a major hiring wave fueled by the world’s pandemic-driven surge toward e-commerce, a significant period of growth and then an economic downturn plagued by inflation, higher interest rates and other macroeconomic challenges.
- Danish startup Pleo can lay off 15% of its employees. Jeppe Rindom, co-founder and CEO of Pleo — which raised $200 million less than a year ago at a valuation of $4.7 billion — revealed that the company’s new strategy impact 15% of his roles. He added that “maybe 150 of our colleagues have to leave.” Pleo is a developer of expense management tools aimed at SMBs that help them issue company cards and better manage how employees spend money.
- Credit Karma, now a subsidiary of Intuit, has “decided to pause almost all hires”. This is according to an internal email that Chief People Officer Colleen McCreary sent to employees. McCreary referred to “income challenges due to the uncertain environment.” This was repeated in Intuit’s fourth quarter earnings call, in 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 during the last few weeks of the first quarter.”
- Online notarial services remotely provider Notarize cuts her team with 60 people. A spokesperson told me via email that “the reorganization impacted almost all teams and that the decision served the larger strategy we have at Notarize, and will allow us to act faster to serve our clients as best as possible.” may be of service.” The spokesperson added that a small real estate-focused team was fired in September in response to both the strategy shift and “the drastic drop in demand from the specific clients they served.” The recent layoffs follow a larger layoff in June that affected 110 people. Prior to that reduction, Notarize had approximately 440 employees. There are currently 250 people working in the United States.
I wrote this newsletter on November 3rd because I’m traveling to celebrate my 20th wedding anniversary, so it’s possible that there have been more layoffs between then and now. 🙁 What this means for the wider fintech world isn’t clear yet, but when well-funded companies like Chime, Stripe and Pleo cut staff, it’s bound to be sobering for all players – big or small – in the space.
Special thanks to TC senior reporter and very nice guy Kyle Wiggers to help me prepare the Weekly News and Financing and M&A sections below so I could go offline and pack my things for my trip!
jeeves, the fintech startup that recently raised $180 million at a valuation of $2.1 billion, told londonbusinessblog.com via email that it has launched a service called Jeeves Pay that is billed as a “credit-backed business payment solution” for businesses. customers. At a high level, Jeeves Pay lets customers use their existing credit line to send wire transfers or pay suppliers, ostensibly solving the problem of having to rely on cash or revenue to fund local and cross-border business and supplier payments. 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 ways to grow in the corporate card and expense management market. To that end, the company announced on Wednesday a partnership with Techstars to expand Brex services to companies within the accelerator, following similar partnerships with Y Combinator and AngelList. During the accelerator, Techstars participants will receive a support team for the Brex platform, access to exclusive Brex events and free use of Brex’s financial forecasting platform Pry. In an interview with londonbusinessblog.com, Brex CEO and co-founder Henrique Dubugras described the move as a customer acquisition.
At Disrupt, londonbusinessblog.com . interviewed Brex’s Dubugras takes the stage on the company’s recent strategy shift, with a greater focus on software and the enterprise. A piece for TC+ highlights juicy highlights from the conversation, including why Brex decided to stop serving companies funded outside of its venture capital structure and the implications of the company’s layoffs earlier this year.
Also at Disrupt, driveway CEO Eric Glyman, Airbase CEO Thejo Kote and Anthemis partner Ruth Foxe Blader took part in a roundtable discussion about competing in the increasingly crowded spend management space — a space, worth noting, that is estimated worth tens of billions of dollars. Glyman and Kote talked about how they work to preserve capital, while Blader offered some of the advice she gives her portfolio companies. Our TC+ summary has the highlights.
How can finance-focused proptech startups survive the recession? In a TC+ exclusive, we asked three experienced investors to share their perspectives. One of the main focuses: survivability is higher for proptech startups that let consumers invest fractionally in real estate and increase access for those looking for a rent-to-own approach. Another: companies that help others navigate tough times seem to be particularly sought after.
Are landlords and tenants finally ready to ditch paper checks? JPMorgan Chase guesses they are. The couch this week launched a pilot platform for property owners and managers that automates the invoicing and receipt of online rental payments. The market is huge — JPMorgan estimates that more than 100 million Americans collectively pay $500 billion annually in rent to 12 million property owners — but convincing landlords to move away from checks and money orders won’t be easy. Only 22% of rent payments today are made digitally, according to JPMorgan.
And other news
Disaster has announced a new global compensation feature allowing its customers worldwide to pay employees in more than 175 countries and 80 currencies.
Digital home buying platform Prevu takes mortgage technology from Reali . abouta real estate technology company that announced earlier this year to close after raising $100 million in 2021.
Financing and M&A
Seen on londonbusinessblog.com
Givingli digital card and gift platform receives $10 million
Retiirable secures $6 million to plan retirement for those without millions in savings
Money Fellows, an Egyptian fintech digitizing money circles, raises $31 million
Fintecture wants to replace paper checks or manual transfers for B2B payments
Troop calls on retail investors to get the proxy vote
Eric Schmidt Backs Former Google CEO Digital Family Office Platform With $90 Million Funding
Crowded’s app gives clubs, associations banking flexibility
Loop lassos ex-Uber talent and money to finally fix freight billing
Treasury management startup Vesto wants to help other startups put their inactive cash to work
WeTravel Books $27 Million to Build Fintech and More for Tailor-Made Group Travel
Uber alum raises $9.7 million to curb financial squabbles between co-parents
Orum raises $22 million to inject AI into sales prospecting process
Kudos raises $7 million to recommend the right credit card for store rewards
That’s it from me for this week. Thanks again for reading!! Until next time, hopefully with more uplifting news. xoxo Mary Ann