Irish fintech unicorn Wayflyer is laying off 40% of its global workforce today, Sifted has learnt.
Cofounders Aidan Corbett and Jack Pierse informed European employees of the layoffs in an all-team meeting this morning. Staff in the company’s New York, Atlanta and Australia offices will be informed later today. The layoffs will affect 200 employees.
Like many of Europe’s startups that have had to make significant cuts to their staff this year, Corbett admitted that Wayflyer had overstretched on growth.
“We tried to scale our organisation very aggressively over the past 15 months, and in hindsight, we tried to do too much, too soon,” he said in a statement shared with Sifted.
“We are sorry to be losing many great colleagues, who have helped Wayflyer become a market leader in revenue based finance. However, we are now facing a challenging macroeconomic environment and this change will put the company in a stronger financial position to execute its plans for 2023 and beyond.”
Around 70 of Wayflyer’s 220 Irish employees will be laid off as part of the plans, and the company is planning to relocate 10 roles from the US to its Dublin HQ.
It comes after Wayflyer hit unicorn status when it raised a $150m Series B funding round in February this year, from investors including QED Investors, JP Morgan and Checkout.com’s multibillionaire founder Guillaume Pousaz.
Losses at the Irish unit of the startup grew sevenfold in 2021 to €22.3m, from €2.9m in 2020, as the fintech increased its global headcount fivefold.
The company said it has notified the appropriate government officials and will soon enter into a consultation period for roles at risk of redundancy this month.
“We are providing transition and benefits packages with the goal of making the transition as supportive as possible for impacted teammates,” Corbett said.
Wayflyer became a bit of a poster child, not only for Irish tech, but for the ecommerce-focused revenue-based financing (RBF) sector that was oh-so-hot among investors in 2021.
But this kind of lending has got a whole lot riskier in the current macroeconomic environment. Different RBF companies lend to companies in different sectors — some lend to a combination of SaaS companies, tech startups, and ecommerce businesses. But Wayflyer is focused purely on lending to ecommerce, the sector that is most exposed to the current macroeconomic headwinds.
As consumers' discretionary spending falls, the ecommerce businesses that Wayflyer lends to may struggle, which increases the chance of them defaulting on loans.