Earlier this week, Swedish FinTech unicorn Klarna announced an austerity program and the layoff of 10% of its workforce. San Francisco-based Bolt Financial had to follow this path and lay off around a third of its workforce, or around 250 employees, to reach profitability with the money available. The Bolt layoffs came just months after investors valued FinTech at $11 billion. PayPal and other FinTechs also announced layoffs and hiring freezes. Evidently, the FinTech sector switches into crisis mode.
Since its inception in 2014, Bolt has raised more than $1 billion in funding and was valued at $11 billion at its $355 million Series E issuance in January. Investors include funds and accounts managed by BlackRock, Schonfeld, Invus Opportunities, CreditEase, H.I.G. Growth, Activant Capital, and Moore Strategic Ventures.
“It’s no secret that the market conditions across our industry and the tech sector are changing, and against the macro challenges, we’ve been taking measures to adapt our business,” Bolt chief executive Maju Kuruvilla wrote in a note posted on the company’s blog. “In order to secure Bolt’s financial position, extend its runway, and reach profitability with the money it has in hand, the company has decided to reduce the size of its workforce,” he added.
Kuruvilla — a former Amazon executive — took over as CEO in January after founder Ryan Breslow stepped down. The 27-year-old founder, Breslow, is widely known for his very outspoken tirades, such as this series of tweets and his recent attacks on the media.
Bolt is not the only tech startup scaling back operations as the pandemic highs finally come to an end. Major tech companies like Microsoft, Nvidia, Lyft, Snap, Uber, Meta, Salesforce, Coinbase, or Klarna have announced hiring freezes. While it certainly is not the end of the world, it seems that the tech market in general and the FinTech sector, in particular, have switched into crisis mode after a long boom cycle.