Welcome to Startups Weekly, a fresh look at this week’s startup news and trends. To receive this in your mailbox, subscribe here.
As the VC data for the second quarter begins to emerge, it’s becoming clear that there’s a difference between how the startup market operates and how it actually feels. Of course, the movement of capital has slowed down, but at least in the United States the numbers are not as dire as expected.
The numbers, which I would recommend you check out for yourself, provide a healthy dose of perspective in challenging times in tech. It’s a strange dissonance: no matter how much capital there is, it’s clear that startups in all sectors and at all stages are still responsive to macroeconomic challenges.
So this week’s layoffs column will be about contextualizing this dissonance: we have fresh data, courtesy of Trueup, that gives us some insight into who has been hit the hardest, both in terms of institutions and in terms of sectors. from great tech companies. back off.
Trueup, a tech staff platform that tracks layoffs, claims that more than 117 unicorns have announced layoffs since the start of 2022. Of this cohort, the sector with the most layoffs is fintech, followed by crypto and real estate.
Notable layoffs in fintech in recent weeks include Amount, which cut 18% of its staff after a $1 billion valuation just a year earlier, MainStreet, which cut 30% of its staff in the weeks leading up to a potential recapitalization, On Deck, which cut 25%, and cut its acceleration 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, as Coinbase and Gemini have also fired technical staff in response to market changes.
As my colleague Mary Ann Azevedo reports, fintech’s recent downfall is in stark contrast to its busy 2021. Unsurprisingly, the same sector that saw significant venture capital gains is also pursuing layoffs. We hear from investors that growth at any cost comes at its own expense, especially if there is sudden pressure to switch to profitability and focus.
Understanding which sectors are experiencing the highest percentages of layoffs gives us a better idea of where to tighten our belts in a profit-driven startup environment. However, things are quickly skewed: There could be more notorious layoffs in fintech and crypto due to the high level of innovation that has spilled over the past few years. Every startup these days is a fintech or web3 startup, which is why volume could be the reason for this drastic decline.
So, that’s what I’m dabbling in these days. In the remainder of this newsletter, we will look at creative ways to manage your investment tables, the impact of The Roe’s rollout on technology and boilers. As always, you can support me by forwarding this newsletter to a friend or follow me on twitter or subscribe to my blog.
Deal of the Week
AngelList Venture is launching Stack Equity Management, a way for startups to organize and manage their equity spreadsheets on the platform. Stack Equity is a set of products that companies use to set up, upgrade, and acquire shares of founders, employees, and investors. Starting today, it is available for US corporations C.
Here’s why it’s important: The company goes head-to-head with its biggest competitor Carta when it comes to capitalization table management pricing. Stack Equity Management charges companies based on team members, while Carta charges companies based on stakeholders, also known as investors, on the cap table. We love some fintech drama!
Cauldrons, bolts and sour markets: welcome to Halloween in July
This week we had a spooky episode on the Equity channel, as you can guess from its title. For me, the highlight of this episode was how one company went from filing a lawsuit against a startup to settling the dispute by becoming a shareholder in the same company. Yes.
Here’s why it’s important: Forever21’s parent company is suing fintech Bolt, which has been in constant trouble and reshuffling because it failed to deliver on its promises. Fast forward to today: the same company paid off Bolt by becoming a shareholder in the startup. Talk about a quick turn. Here is an excerpt from Mary Ann’s article:
As for Bolt’s cozy new alliance with its previously frustrated client, Curuvilla suggests it’s all about the water now.
He noted that “Both Forever21 and Lucky Brand have been using Bolt for a long time and they will continue to use it in the future as part of this renewed partnership.”
“Both ABG management and I are working together to figure out how to expand it and that comes directly from their CEO because he has a very high bar for the partners he wants to partner with,” Curuvilla added. “Obviously he has a strong belief in Bolt and our products. So we are excited to take it to the next level.”
In a week
Seen on TechCrunch
Looks like Elon Musk is still trying to get out of his own deal with Twitter.
Sequoia wants to invest $1 million in your idea and then teach you how to market it.
Twitter begins testing ‘CoTweets’ to allow users to co-author tweets
Former Theranos chief Sunny Balwani found guilty of fraud
MKBHD Says Yes to Google Glass and No to the Metaverse
Seen on TechCrunch+
Row’s failure has a big impact on emerging tech cities in the red states
As the global venture capital market slows down, is the US avoiding a downturn?
Pitch Deck Teardown: $2.1M Source Enduring Planet Deck
7 Ways Investors Can Gain Clarity When Conducting Technical Due Diligence
Cryptocurrency losses in the second quarter reached $670 million, up 52% from last year.
See you later,
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