The cuts for the startup come just months after it expanded to Germany and Ireland.
Toronto-based ecommerce lender Clearco has laid off 125 employees – 25 per cent of its current staff.
The company’s co-founders, Michele Romanow (CEO) and Andrew D’Souza (executive chairman), shared the news in a company-wide memo, citing the macroeconomic environment for the need to cut its workforce.
Romanow and D’Souza both shared the full memo on their respective LinkedIn pages, expressing their gratitude to all their employees.
“As a founder, it’s humbling to know that people care enough about a mission to want to devote time to it day in and day out,” D’Souza wrote.
“I care deeply about the people on this journey with us. So the reality that many of those who helped us get this far won’t be able to join us for this next chapter was one of the most difficult decisions Michele and I have had to make yet,” he added.
All employees impacted will receive severance pay, a two year window to exercise equity, extended health coverage and job transition support from the leadership team.
No specifics were given as to which teams or roles would be impacted, or if any c-suite employees would be cut.
“To those we had to say goodbye to today, please know that your value extends far beyond Clearco. No matter how long you were with us, I am so grateful to have had you as part of the journey,” Romanow wrote.
The decision to cut staff comes just months after Clearco launched in Ireland and Germany.
Now the company, formerly Clearbanc, says it is considering ‘strategic options’ for its international operations.
Since launching, the startup has been built around helping ecommerce businesses gain access to capital, sales, deals and data.
As consumer activity slows, the revenue-based funding model has been shaken.
In a section of the memo headed ‘How did this happen?’ Romanow and D’Souza wrote that the short answer is “the current macroeconomic environment looks very different today than in 2021”.
They went on to reference the rising interest rates, high inflation and the swing in European currency all resulting in a slowdown in ecommerce growth.
Romanow and D’Souza said they grew their headcount too quickly, anticipating economic growth would continue the trajectory it was on six months ago, having committed to adding 125 staff to its Dublin hub just months ago.
When the company then expanded to Germany in June, it also cut 10 per cent of its staff in Ireland.
The company has had a series of successful raises, securing a huge $215m last July in a round led by Softbank, just months after a $100m round saw its valuation quintuple to $2bn.
“As painful as today is, it should remind us to move forward with more focus, determination and purpose than ever,” Romanow and D’Souza wrote.
Clearco declined to comment.
24 March 2023
24 March 2023
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