Welcome to Startup Weekly, a fresh human-first presentation of this week’s startup news and trends. To get it in your inbox, Subscribe here.
As venture capital data for the second quarter comes out, it is becoming clear that there is a gap between how the start-up market is performing and how it is actually performing. Sure, capital has slowed, but in the United States at least, the numbers aren’t as devastating as expected.
The numbers – which I would recommend looking at for yourself – give a healthy dose of perspective during tough times in tech. It’s a strange anomaly: No matter the amount of capital, it’s clear that startups across sectors and stages are still responding to macroeconomic concerns.
So this week’s sorting column is all about pointing out that discrepancy: we have new data thanks to TruUp that gives us some color, which are the hardest hit by great tech in terms of both institutions and sectors. has gone. sorting
TruUp, a tech recruitment platform that tracks layoffs, claims more than 117 unicorns have announced layoffs since early 2022. In this cohort, the sector with the most layoffs is fintech, followed by crypto and real estate.
Notable layoffs in the fintech space in recent weeks include the one that shed 18% of its workforce after a $1 billion valuation a year ago, MainStreet, which shed 30% of its workforce before seeking a potential recapitalization , on Deck, which cut 25% and scaled Back its Accelerator program and Klarna, which cut 10% of its workforce before seeking funding at a lower valuation.
Layoffs are not uncommon in the crypto world either, with Coinbase and Gemini also firing tech staff in response to the market.
As my colleague Mary Ann Azevedo reports, fintech’s recent decline stands in stark contrast to its busy 2021. Not entirely surprising that the same sector that has seen massive venture capital gains is also seeing layoffs. Growth at any cost, we’ve heard from investors, comes at a cost — especially when there’s sudden pressure to drive profitability and focus.
Understanding which sectors have the highest percentage of layoffs gives us a better perspective on where exactly the belts need to be tightened in a profitability-focused startup landscape. However, things quickly go awry: the high level of innovation in recent years may have led to more publicly known layoffs in the fintech and crypto sectors. Every startup these days is a fintech or web3 startup, which is why the massive drop can be so dramatic.
Well, that’s who I am these days. In the rest of this newsletter, we’ll look at a creative take on cap table management, technique, and how The Row Reversal affects the wok. As always, you can support me by forwarding this newsletter to a friend or by Follow me on Twitter Or subscribe to my blog.
offer of the week
AngelList launches Venture Stack Equity Management, a way for startups to organize and manage their cap tables within the platform. Stack is a suite of equity products that companies use to build, update, and acquire founder, employee, and investor capital. It is available today for US-based C Corporations.
Therefore it is important: When it comes to managing cap table prices, the company competes against its biggest competitor, Carta. Stack charges companies based on equity management team members, while Carta charges companies based on a cap table based on stakeholders, aka investors. We love fintech drama!
Pan, Bolt and Sour Market: Welcome to Halloween in July
We had a great episode on equity this week, as you can tell from the episode title. For me, the highlight of this episode so far has been how a company went from suing a startup to establishing itself as a shareholder of the same company. Oh.
Therefore it is important: Forever21’s parent company is suing fintech Bolt for clashes and executive reshuffles for failing to deliver on its promises. To date, the same company has come to terms with Bolt by becoming a shareholder in the startup. Talk about rapid change. Here is an excerpt from Mary Ann’s play:
As for the Bolt’s new comfortable alliance with its previously disappointed customer, Kuruvilla now suggests it’s water under the bridge.
He added that “Both Forever21 and Lucky Brand have been using the Bolt for a long time and they will continue to use it with this renewed partnership.”
Kuruvilla said: “Both the ABG leadership and I are working together to see how we can grow this further and that comes straight from their CEO because they have the kind of partners to connect with. There are very high standards for that.” “They clearly believe in Bolt and our products. So we are excited to take it to the next level.”
seen on techcrunch
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CryptoKitties’ losses hit $670 million in the second quarter, up 52% from the year-ago period
Until next time,