At 17:00 on 29 February 2024 Sifted updated this article to reflect a response from kevin.
In 2022, Lithuanian startup kevin was a rising star in regional, if not European, fintech.
It had raised a $65m Series A from investors like Accel and Eurazeo, hired more than 300 people across the continent and was on a tried-and-tested trajectory to unicorn status.
But today its future doesn’t seem so bright. Five current and former staffers tell Sifted that while kevin tried to secure additional funding, it failed to pay salaries on time in January and February. At least two employees, as of 19th of February, were waiting for two months of salary payments.
It eventually struck a deal with existing investors to get a $25m bridge round, which three employees tell Sifted was revealed during a company-wide meeting on February 12.
In a response to Sifted, kevin said that this is “false information.”
But a condition of the funding was to reduce burn rate and acquire several new customers and partnerships.
As a result, employees tell Sifted that kevin began a “brutal” redundancy process at the end of January, when managers were informed they would need to lay off entire teams.
According to the current and former employees, the company announced to the wider team at the beginning of February that approximately 100 people, half of the company’s remaining workforce, would be made redundant before April.
Kevin told Sifted that in February “approximately 14% of the company's total workforce were fired”.
Sifted has reached out to kevin’s VC investors for a comment but hasn’t received any response.
Salary delays
Founded in 2017, kevin, a payments startup that facilitates user-to-user transactions, is headquartered in Vilnius and has hubs in Warsaw, London, Berlin, Amsterdam and Dubai.
Employees who spoke to Sifted say that while they were aware of gradual layoffs throughout 2023, the first real red flag was in January when they stopped being paid.
Two current employees and one former employee tell Sifted they’d received an email in the afternoon of January 10, the usual pay date, that the salary payouts would be postponed until the end of the month because the company was in the process of raising capital and its accounts had been blocked for audit.
“For me, it was quite clear that something is not right,” says one former employee, who left the company in February.
They later got two other emails that informed about further delays — one at the end of January, and another one mid-February.
As of the 19th February, out of four people Sifted spoke to, two had been paid in full, after at least one month of delay. Two others were still waiting for overdue payments for both their December and January salaries.
“There were a lot of layoffs,” says the former employee.
“Everyday they were firing new people… HR didn't even bother to speak with them. They just connected them with a lawyer to tell them the news… They seemed happier to spend more money on lawyers than on paying their employees.”
‘They didn’t even say sorry’
Layoffs and financial troubles are not rare in the startup world, and more are expected in 2024 as startups that raised massive rounds in 2021 run out of cash and cannot raise more.
But kevin's employees say the company mishandled the situation.
“You went through this period of hyper growth with unrealistic goals and a lot of cheap money, and now you're going up against the wall… it's basically sink or swim and a lot of the companies are sinking,” says an employee who was fired in January.
“This could have been managed a lot better if the top-level executives had been transparent and had communicated upfront. You don't tell people on the day that they're supposed to get paid that they're not going to be paid. You tell them upfront.
“There was zero communication, transparency or communication. Nobody knew anything,” they add. “In December, we were actually given a Christmas package: a hoodie, some coffee cups and whatnot. But we didn't get paid.”
Employees say the company’s founders appeared to be completely detached.
Enquiries via Slack were ignored — and in one case deleted — and then the company-wide Slack channel was made read-only. The person who inquired about the payment system was reprimanded by management, two employees say. When a manager tried to arrange a meeting with the founders to clarify the situation, they didn’t show up, one adds.
Kevin said that this is “false information.”
"They didn’t even say sorry,” says a third employee of the all-hands. “They said thank you for your patience, but never sorry.’”
