💸 The Unfortunate Year of Layoffs

💸 The Unfortunate Year of Layoffs

Hey everyone, and happy first day of August 🍸 

This week like every week, I’m going to tackle the latest and biggest headlines in fintech, the metaverse world, and crypto.

We’ll also be looking at the latest investment rounds all over the world made in the fintech scene.

If you’re reading this and you haven’t signed up yet, make sure you join 8,312 others by clicking the subscribe link at the bottom of this edition.

Thanks for reading Couchonomics Crunch 💸 And I hope you enjoy today’s edition!


TODAY'S MARKET MOVES

Today's Market Moves - August 1, 2022


SOME FAMILIAR FINTECH STOCKS

Fintech Stocks - August 1, 2022


WHAT’S NEW IN FINTECH?

  • FinaMaze, the ADGM-regulated asset management firm, has completed the Fintech Saudi regulatory program for which it was selected in March 2022, along with 11 other fintech companies in the MENA region. The Fintech Saudi Demo Day was held on July 26 where the cohort presented their businesses after months of hard work in developing their product, strategy, and acquiring partners.


  • Australian financial wellbeing fintech company Wagestream has partnered with fixed income micro-savings platform Blossom to offer employees a new way to grow their savings by giving them access to the Blossom Fund which targets a 3% per annum ROI.


  • Zimbabwean fintech startup Cashlinq is set on empowering entrepreneurs across Africa through its “easily accessible” banking platform. Cashlinq is best used as a full banking wallet solution and low current accounts for the likes of farmers, students, and underaged children, says the company’s founder Tendai Mugovi.



Some Fintech startups are officially in survival mode

Michael Scott the Office Stayin'​ Alive GIF

If 2021 was the year of plentiful venture capital and bloated valuations in fintech, 2022 is shaping up as the year of downsizing, with cuts ranging from dramatic and very public layoffs to unannounced staff winnowing.

It's been a tough few months for the fintech industry. Rising interest rates, worries of an impending recession, and an abrupt slowdown in venture investment as VCs tell founders they need at least two years’ worth of “runway” to endure a prolonged downturn. This has caused fintech founders to aggressively reduce expenses. Many are slashing staff to preserve cash and stay alive.


Almost every late-stage company that I know of is either doing layoffs or going to.

Stephanie Choo, partner at fintech-focused VC firm Portage

I have gathered the data from this report by Forbes that summarizes 2022’s layoffs in a nutshell.

  • Stash, the New York personal finance app, dismissed 8% of its staff (an estimated 40 people), according to a spokesperson. 
  • Albert, the Los Angeles digital bank had 300 total employees as of this spring, but two months ago, at least 20 of Albert’s workers were let go. 
  • Varo, a San Francisco digital bank that spent $100 million to get a banking charter, laid off 10% of employees (75 people) earlier this month.

Other digital banks have made big reductions according to LinkedIn data.

  • M1 -- a Chicago-based startup that lets customers invest, use a debit card and borrow money -- has seen its headcount go down from 369 people in June to 349 today.
  • Step, teen-focused neobank went from a peak of 152 employees in March to 135 today.
  • PointCard, the rewards-based debit card startup, has gone from 105 employees in January to 61 today. The company also recently announced that it’s shutting down its first product, the Neon debit card.
  • DriveWealth -- the New Jersey-based startup whose technology is used by Cash App to let customers buy as little as $1 worth of stock -- has seen its employee base fall from 298 to 292 over the past month.
  • Synctera, a banking-as-a-service software startup, has 112 employees today, compared with 129 in February.
  • Vise, a New York startup that uses artificial intelligence to create stock portfolios for investment advisors, laid off 20% of its staff (20 people) in the first week of May.
  • Clearco, a Toronto fintech company that funds eCommerce companies through revenue-sharing agreements, saw its employee count on LinkedIn fall from 618 in May to 582.
  • GoodLeap, a company valued at $12 billion last year that lends money to consumers for green home improvements, recently laid off 30 people (about 2% of its workforce).
  • FlyHomes, a platform that lets users buy and sell homes, cut 20% of its workers (an estimated 200 employees).

Crypto layoffs chart

**Source: https://layoffs.fyi/


Crypto startups are feeling the pain too. With bitcoin’s price down 50% this year and some digital asset lenders going bankrupt, big companies like Coinbase, OpenSea, Gemini and Blockchain.com have dismissed many workers and others followed their steps.

  • iTrustCapital, the crypto retirement account company, let go of 15 people (15% of its staff) a couple of weeks ago.

Insurers have had cuts too.

  • Ethos, the life insurer recently reduced staff.
  • Next, the small business insurer, is letting go of 17% of its workforce (likely more than 150 people).

Some of the largest private fintech companies have avoided cuts so far. Spokespeople from Stripe, Chime, Plaid, and Ramp said they haven’t done layoffs and have no plans to.

The layoffs have been widespread, affecting companies of all sizes and stages of development.

While it's always painful to see talented people lose their jobs, it's important to remember that these tough times will eventually end. The fintech industry will rebound, and those who are able to weather the storm will be well-positioned to take advantage of the rebound. 👑


⚡ QUICK INVESTMENT ROUNDS



  • Indian rural fintech startup Jai Kisan raised around $50 million through a combination of equity and debt in the first close of its ongoing Series B funding round.



💡 REPORT OF THE DAY


Digital Banks, A Proposal for Licensing & Regulatory Regime for India

Today’s report comes from India by NITI Aayog (National Institution for Transforming India). It talks in detail about the next steps for the fintech sector in India and offers a roadmap for digital banks regulations. The report also aims to cement India's place as a trailblazer in the fintech industry and addresses the feedback received from 24 organizations, large-scale stakeholder round table discussion, and consultations with industry leaders. It’s a recommended read for anyone interested in the immense financial market of India. Read the full report here


⏳ BEFORE YOU GO…


  • Metaverse: Ethereum co-founder Vitalik Buterin believes that corporate attempts to build the metaverse will fail




  • Crypto: Final candidates for the next UK Prime Minister, Rishi Sunak and Liz Truss,  have both made pro-crypto statements, with their views on digital assets is likely to influence financial policy.


🛋 THE LATEST ON COUCHONOMICS

For my most recent episode of Couchonomics with Arjun Singh, I had Gaurav Dhar, CEO of Marshal (one of the oldest Fintech's in the MENA region) on the couch with me. We talked about a range of topics including Angel Investing and why Egypt is the sleeping fintech giant of the region

You can also listen to this episode on Apple Podcasts, Google Podcasts, and Deezer


💸 And that brings us to the end of today’s Couchonomics Crunch.

Don’t forget to share today’s edition with all the fintech enthusiasts you know.

Thanks for reading the Couchonomics Crunch. Subscribe here to stay up to date with all the fintech happenings around the world. 

See you later this week! 🙋🏻♂️

happy national day to all our friends in saudi! hope it's a day of joy and reflection for you all. let's also take this opportunity to network and connect. always here to collaborate and share insights. #Letsconnect

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