The fintech layoffs just keep on coming • TechCrunch

Welcome to The Interchange! If you received this in your inbox, thank you for signing up and your declaration of confidence. If you are reading this as a post on our site, please register here so that you can receive it directly in the 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 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 on top of it—and make sense of it—so you can stay up to date. — Mary Ann

Wow, I’m taking a week off and 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 of them as I can here:

• Chime confirmed that they are letting go of 12% of their staff. This corresponds to around 160 people. According to an internal memo obtained by TechCrunch, Chime co-founder Chris Britt said the move was one of many that would help the company thrive “regardless of market conditions.” In the memo, Britt said he and co-founder Ryan King are recalibrating marketing costs, reducing the number of contractors, adjusting workplace needs and renegotiating supplier contractors.
• Opendoor announced that it would let go of 18% of its employees. This is around 500 people. Opendoor co-founder and CEO Eric Wu said his company, a publicly traded real estate fintech, was navigating “one of the most challenging real estate markets in 40 years.”
• Chargebee has laid off about 10% of its employees. As reported by Jagmeet November 2, “Chargebee, backed by marquee investors including Tiger Global and Sequoia Capital India, has laid off around 10% of its staff in a ‘restructuring’ effort due to ongoing global macroeconomic challenges and mounting operational debt. The Chennai- and San Francisco-headquartered 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 employees. As reported by Paul, “Stripe has announced it is laying off 14% of its workers, affecting around 1,120 of the fintech giant’s 8,000 employees.” In a memo published online, Stripe CEO Patrick Collison relayed a familiar narrative regarding the reasons behind the latest job cuts: a major hiring spree spurred by the world’s pandemic-driven surge toward e-commerce, a period of significant growth, and then an economic downturn. with inflation, higher interest rates and other macroeconomic challenges.
• The Danish start-up Pleo can lay off 15% of its employees. Jeppe Rindom, co-founder and CEO of Pleo—which less than a year ago raised $200 million at a $4.7 billion valuation—revealed that the company’s new strategy will affect 15% of roles. He added that “up to 150 of our colleagues may have to leave”. Pleo is a developer of expense management tools aimed at SMBs to allow them to issue company cards and better manage how employees spend money.
• Credit Karma, now a subsidiary of Intuit, has “decided to cease nearly all hiring.” This is according to an internal email sent to employees by Chief People Officer Colleen McCreary. McCreary referred to “revenue challenges due to the uncertain environment.” This was echoed in Intuit’s fourth-quarter earnings call, where 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 final weeks of the first quarter.”
• External electronic notarization services provider Notarize cuts its team by 60 people. A spokesperson told me via email that “the reorganization affected almost every team and the decision was consistent with the larger strategy we have adopted at Notarize and will enable us to move faster to best serve our customers.” The spokesman added that in September, a small real estate-focused team was laid off in response to both the shift in strategy and “the drastic drop in demand from the specific clients they served.” The latest layoffs follow a larger layoff in June that affected 110 people. Before that reduction, Notarize had around 440 employees. It currently employs 250 people across 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 took place between then and now. 🙁 What this means for the wider fintech world is not yet clear, but when well-funded companies like Chime, Stripe and Pleo cut staff, it’s no doubt sobering for all the players – big or small – in the space.

Special thanks to TC senior reporter and very nice guy Kyle Wiggers for helping me prepare the weekly news and funding and M&A sections below so I could go offline and pack for the trip!

Weekly news

Jeeves, the 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 that it bills as a “credit-backed business payment solution” for corporate customers. At a high level, Jeeves Pay allows customers to use their existing credit line to send transfers or pay suppliers, seemingly 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 avenues for growth in the corporate card and spend management market. To that end, the company on Wednesday announced a partnership with Techstars to extend Brex services to companies within the accelerator, following similar tie-ups 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 Pry financial forecasting platform. In an interview with TechCrunch, Brex CEO and co-founder Henrique Dubugras described the move as a customer acquisition play.

At Disrupt, TechCrunch interviewed Brex’s Dubugras on stage about the company’s recent change in strategy, which involves a stronger emphasis on software and the company. A piece for TC+ breaks down the juicy highlights from the conversation, including why Brex decided to stop serving businesses funded outside the venture capital structure and the implications of the company’s layoffs earlier this year.

Also at Disrupt, Ramp CEO Eric Glyman, Airbase CEO Thejo Kote and Anthemis partner Ruth Foxe Blader participated in a roundtable on competing in the increasingly crowded spend management space — an area, it’s worth noting, estimated to be worth tens of billions of dollars. Glyman and Kote shared how they work to preserve capital, while Blader shared some of the advice she gives to her portfolio companies. Our TC+ roundup has the highlights.

How can finance-focused proptech startups survive the downturn? In an exclusive for TC+, we asked three experienced investors to give their perspectives. One of the key benefits: The chances of survival are higher for proptech startups that allow consumers to invest fractionally in properties and increase access for those seeking a rent-to-own approach. Another: Companies that help others navigate tough times seem to be in particular 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 combined $500 billion a year in rent to 12 million property owners—but convincing landlords to move away from checks and money orders will be no easy feat. Only 22% of rent payments are made digitally today, according to JPMorgan.

And other news

Capchase expands to Germany to close the funding gap for German SaaS companies.

Ramp announced a new global reimbursement feature allowing customers to pay global employees in more than 175 countries and 80 currencies.

Digital home-buying platform Prevu is buying mortgage technology from Reali, a real estate technology company that announced earlier this year it was shutting down after raising $100 million in 2021.

Marqeta announces Marqeta for Banking, expanding its platform with new banking functions.

Financing and M&A

See TechCrunch

Digital card and gift platform Givingli costs 10 million dollars

Retirable secures $6 million to plan for 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 brings together retail investors to obtain the proxy vote

Eric Schmidt is backing the former Google CEO’s digital family office platform with $90 million in funding

Crowded’s app gives clubs, associations banking flexibility

Loop lasso’s former Uber talent and money to finally fix freight billing

Treasury management startup Vesto wants to help other startups put their spare cash to work

WeTravel orders $27 million to build fintech and more for customized group travel

Uber alum raises $9.7 million to quell finance-related fights between co-parents

Orum raises $22 million to inject artificial intelligence into the sales prospecting process

Kudos raises $7 million to recommend the right credit card for shopping rewards

And other places

InterPrice Technologies, a treasury capital markets funding platform, announces a $7.3 million Series A led by Nasdaq Ventures and DRW Venture Capital

Vesttoo’s value more than triples to $1 billion after the latest funding

Zest AI raises over $50 million in growth funding

That’s it from me for this week. Thanks again for reading!! See you next time, hopefully with more uplifting news. xoxo Mary Ann