The “buy now, pay later” provider is saying goodbye to a large chunk of its workforce, but continues to seek $25 million in funding.
A buy now, pay later supplier with offices in Sydney has laid off 30% of its workforce, blaming market conditions for the huge downsizing.
Still, the company called BizPay is currently trying to raise $25 million in funding and has partially completed it.
It has already attracted $45 million in funding since its launch in late 2019, according to reports.
Affected staff are due to complete their work at the company by Friday, although the company did not disclose the number of those made redundant.
BizPay is a form of BNPL used by other businesses to pay bills from vendors such as lawyers, accountants, or consultants over four monthly installments and charges business fees.
Its co-founder and chief executive, David Price, said the job cuts were a “strategic decision”.
“Due to the uncertainty in global markets, particularly the technology sector, and current market conditions, we have made the strategic decision to streamline operations and our workforce to support BizPay’s next phase of growth. “, he told news.com.au.
He added that the new automated processes had improved efficiency, requiring a “leaner and more agile workforce” to improve its competitiveness in the space.
“Unfortunately, as part of this process, we have had to make staff reductions to accommodate these changes,” he said.
Earlier this year, experts predicted potential “carnage” for the buy now, pay later industry as suppliers burn through cash, bad debts rise and customers forgo using the service – a pattern that, according to them, is not sustainable.
In April, Australian tech giant Buy now pay later Afterpay posted a staggering mid-year loss of a hemorrhage of $345.5 million in the six months to December 31, 2021.
This was a considerable drop from its previous half-year results, where it lost $79.2 million in the first half of 2021, meaning the company’s losses ballooned by 336%.
Meanwhile, shares of Zip Co have fallen 72% this year.
BizPay had previously floated the possibility of floating on the Australian stock market through an initial public offering (IPO) and in April last year it was estimated to reach a market capitalization of $400 million, the Australian Financial Review reported.
Mr Price said he was working on the timing and size of his current raise.
“As for our capital raise, we are working closely with our investment bankers on the timing and size of the raise,” he said.
“We managed to raise some of the funds; however, it is a tough market, especially for fintechs. We believe that the measures we have put in place and the automation capabilities will be well received by the market and will help us scale the business. »
In March, BizPay said it achieved significant growth with more than 10x revenue over the past year, reported Retail business.
“The payments ecosystem is accelerating at lightning speed, and we’re excited to leverage that growth in 2022…” Price told the publication.
“By bringing a unique and disruptive product to an untapped market, we have set up the business to succeed both locally and globally. With an innovative AI-led approach, supported by a talented team, we aim to continue delivering outstanding results on the path to IPO. »