The year 2022 is not the same as 2021 in the small world of start-ups. While fundraising reached record levels last year – more than 120 billion in Europe, including 11.6 billion in France – venture capital has slowed for several weeks. According to CB Insights, start-ups raised $ 143.9 billion worldwide in the first quarter of 2022, down 19% from the last quarter of 2021. The number of deals dropped 4.5% between the two phases. .
This drop in funding, which looks more like a return to normal, is leading some start-ups to lay off workers. The “Cafétech” newsletter identified 50 tech social plans (including start-ups) in May, more than in the entire 2021.
Back to reality
This movement, which began in the United States, came to Europe. Within weeks, many large start-ups announced that they had split from part of their workforce. The first to give up in February was British online event platform Hopin, which laid off 12% of its staff, or 138 full-time people, according to the TechCrunch site.
“Following unprecedented growth and several acquisitions, we are re-adjusting to align with our goals and achieve better and sustainable growth,” explains the start-up, which experienced meteoric growth during the confinement.
Recently, Swedish fintech Klarna announced a cut of about 10% of its global workforce, or 700 positions, as it seeks to raise nearly $ 1 billion at 30% lower value, after the ‘Wall Street Journal’ . “We have seen a tragic and unnecessary war break out, a change in consumer sentiment, a sharp rise in inflation, a highly volatile stock market and a likely recession,” said CEO Klarna. Sebastian Siemiatkowski in a statement. a message to the group’s 7,000 employees.
Striving shopping delivery platforms
Fast trade experts, who have chained mega fundraisers in recent months, are also making large budget cuts. German Gorillas, which got its hands on French Frichti at the beginning of the year, laid off 300 employees based at its headquarters, to “strengthen the company’s orientation towards profitability”. Its Turkish rival Getir, for its part, will lay off 14% of its payroll, or more than 4,000 employees, or weeks after announcing the rounding of funding of 768 million dollars to 12 billion.
This super-fast shopping delivery platform wastes a lot of money by flooding consumers with discount coupons, and advertising all over the floor. In addition, unlike VTC platforms, they use their carriers on permanent contracts. An economic model that does not ensure profitability in the short or medium term.
So far, no French start-up has announced major plans or recruitment freezes. But spending will intensify in the coming months, especially for start-ups that are about to run out of funds.
“We tell our start-ups to take care of their money, to review their recruitment, marketing acquisition and international deployment plans. It’s better to show local traction than to attack certain markets, “Salomon Aiach, partner at Earlybird, told Les Echos a few days ago. It remains to be seen how long this will take.
Incomplete list of European start-ups laying off workers
Getir (shopping delivery): 14% of the workforce, i.e., 4,500 people.
gorillas (shopping delivery): 2% of the workforce, i.e., 300 people.
Hopin (events): 12% of the workforce, i.e., 138 employees.
Kry (e-health): 10% of the workforce, i.e., approximately 100 people.
Nuri (fintech): 20% of the workforce, i.e., 45 employees.
Klarna (fintech): 10% of the workforce, i.e., 700 people.
No cover (fintech): 26% of its workforce, or 26 people, according to Sifted media.