Former fintech ‘unicorn’ Truelayer laid off a quarter of staff in one day
Former fintech ‘unicorn’ Truelayer laid off roughly a quarter of its workforce in a single day as part of an effort to slash costs and become profitable, City PM can reveal.
The London-based firm axed 71 roles at the end of September a week before announcing a $50m funding round that lowered its valuation, according to two people familiar with the matter.
Sources said employees were summoned to a meeting with roughly two hours warning, where they were informed of the job cuts. Affected staff left the company on the same day, they added.
One insider said internal communications put the proportion of employees impacted at around 25 per cent.
A spokesperson for Truelayer declined to comment on the details. They said its latest funding round marked “yet another vote of confidence in our company”.
“At the same time, we also announced important steps to chart our path toward profitability, including streamlining operational costs and a reduction in headcount which took place in September,” they continued.
Truelayer’s valuation fell by roughly 30 per cent in the fundraise, stripping the firm of its more than $1bn ‘unicorn’ price tag acquired in a 2021 round.
Several major European fintechs have accepted lower valuations to secure cash over the last two years as they struggle to achieve the profitability demanded by venture capital investors.
Francesco Simoneschi, Truelayer’s chief executive, told City PM in June that the “funding environment is way tighter than it used to be”. He confirmed in an October LinkedIn post that the firm had restructured its operations and reduced headcount to boost its bottom line.
Truelayer, founded in 2016, uses open banking to provide payment solutions for clients including Revolut, Coinbase and Shopify. The firm counts New York-based Tiger Global and fintech giant Stripe among its investors.
The most recent job cuts came after a roller-coaster of hiring and attrition for the fintech over the past three years.
Its accounts for last year show headcount fell to a monthly average of 346 in 2023, down from 434 in 2022 – when it laid off 10 per cent of staff. That followed a hiring spree which nearly doubled the number of Truelayer’s employees from 231 in 2021.
Efforts to rein in expenses underscore the sector’s shift away from a ‘growth at all costs’ mindset that peaked in 2021, when ultra-low interest rates saw investors pour money into loss-making start-ups promising to revolutionise financial technology.
While Truelayer’s operating losses narrowed last year, they still totalled £54.1m as administrative expenses of £61.9m offset a tripling in revenue and doubling in payment volumes.
Simoneschi previously said the firm is an “infrastructure business” that would need to spend more money building a network for the mass adoption of open banking in the UK.
The tech can enable payments directly between bank accounts, bypassing card networks dominated by Visa and Mastercard.
TrueLayer is among a pack of British open banking fintechs positioning themselves as disruptors to this duopoly. Others include GoCardless, Yapily and Volt.