German crypto-focused digital bank Nuri is the latest to feel the chill winds of change in fintech markets, announcing plans to lay off 20% of its workforce in a drive to reach profitability.
Massive corrections in tech and fintech valuations since the end of Q4 combined with challenging macro-economic conditions are providing an existential threat to fintech firms which have relied on readily-available VC funding to grow their businesses.
"Venture capitalists have become more cautious and compared to 2021, the venture capital investment records have slowed down considerably," says Kristina Walcker-Mayer, Nuri CEO. "To get funding now and in the near future, companies have to show that they are on the home stretch to profitability - and this is also true for us."
Formerly known as Bitwala, the German mobile bank leans on Solarisbank for licencing and regulatory requirements, offering customers saving and crypto investment products. The company currently counts half a million customers and a quadrupling of revenue over the course of 2021.
"Our strategy and planning so far was set up for high user growth and activity, as these were the parameters for startups in the past - and we have succeeded in achieving that," says Walcker-Mayer. "However, the macro-economic developments are leading to more uncertainty in the financial markets, particularly the venture capital space, meaning that our planned strategy is not in line anymore with the massively changing market expectations."
In total 45 jobs will be terminated, adding to the recent round of layoffs at a host of big-ticket fintech firms, including Klarna and Bolt.
BY way of contrast, news just in from digital credit card provider JaJa Finance bucks the trend by committing to a 40% increase in its workforce before the end of the year.