Asto Digital, a UK startup offering small businesses app-based invoice and expense management services, as well as short-term financing, is set to shut down after parent Santander pulled the funding plug, Finextra understands.
The company's 65 employees were told on an all-firm video call with CEO Nicolette Maury on Thursday that Asto will wind down by the end of the year, according to a source with first-hand knowledge.
A Santander spokesperson confirms to Finextra: "As part of our commitment to continuously evaluate our customer proposition, we have decided to wind down the business and operations of Asto Digital Limited."
Maury told staffers that Santander - which is thought to have put tens of millions of pounds into Asto - is cutting funding, leaving the company without the means to keep running.
Layoffs of employees will begin as early as next month and continue throughout the year.
However, it is understood that Santander is working to redeploy many employees.
Santander is thought to have cut its losses after Asto failed to achieve sufficient growth, despite securing a high profile deal with eBay in 2019 to offer cash flow loans to the online marketplace's 200,000 small business customers in the UK.
Finextra understands that Santander is working with eBay to continue supporting the programme and its mutual customers.
Says a bank spokesperson: "Whilst the growth and momentum of Asto has been strong, we believe there are more effective ways in which the bank’s resources can be deployed to benefit our small business customers.
"We are exploring options for the continuation of elements of Asto’s business, which may include transferring certain activities to other group entities.
"Santander will also use Asto technology to improve the SME experience at scale. In the meantime, we are engaging with employees, customers and stakeholders to ensure an orderly wind down."
Asto has lost several senior staffers in the last six months amidst rumours of low morale. The firm's three most recent reviews on Glassdoor all give it one star, with CEO Nicolette Maury and CTO Thomas Boltze both heavily criticised.
The unit is one of several inhouse startups - called Speedboats - that Santander has fostered in recent years in an effort to take the fight to fintechs and the Big Tech players moving in on its patch.
International money transfer app PagoFX, and digital lender Openbank have proved more successful bets, winning favour at the bank.