Stripe has fired a number of employees who support TaxJar, a tax compliance startup it acquired last year, ukbusinessupdates.com has learned from multiple sources and first-hand documentation.
The layoffs — which took place over the past month — are related to Stripe’s decision to phase out its go-to-market efforts targeting TaxJar in late July. Sources estimate that the number of employees affected by the cut is between 45 and 55 people, at least some of whom were invited to take 30 days to apply for internal jobs at Stripe.
ukbusinessupdates.com contacted Stripe for confirmation, and a spokesperson said the company declined to comment. According to LinkedIn, Matt Anderson, the co-founder of TaxJar, left Stripe in July, followed by people in its sales, marketing and partnership teams. Anderson did not immediately respond to the request for comment
Stripe bought TaxJar, a provider of a cloud-based suite of tax services, in April 2021 to help its customers “automatically calculate, report and file sales tax.” At that point, Stripe told ukbusinessupdates.com that all 200 employees of the Massachusetts-based company joined the company. The purpose of the acquisition was to integrate sales tax collection and remittance as a service, one of the most requested features from users.
In July, Stripe went through a 409A valuation process in which its internal valuation was reduced by 28%. The wealthy company is valued at $95 billion by investors, but the implied new internal stock price is around $74 billion. While valuation cuts are often viewed as a negative event for a company, industry experts argued that a lower 409A valuation — which is set by a third party and different from what venture capitalists measure — makes it cheaper for employees to exercise vested options.
Fintech has not been immune to the downturn – for proof, look no further than the stock quotes of Block (formerly Square) PayPal, Robinhood and Affirm. According to CB Insights, in the second quarter of 2022, global fintech funding fell 33% to $20.4 billion across 1,225 deals in Q2 of Q1 2022, and nearly 46% from the $37.6 billion raised at 1,287 deals in Q2 2021.
It’s a similar story when we look at some players in the startup world. On Deck, a venture-backed startup accelerator that invests in other companies, recently cut 25% of its workforce and scaled back its accelerator program. Then, months later, it cut a third of its staff. MainStreet, which itself had just been laid off, underwent a recapitalization of some investors. The company was valued at $500 million last year for its platform that helps startups discover tax credits.
Also one-click startup on the cash register Bolt fired at least 180 employees and counting over go-to-market, sales and recruiting functions. That move came just a month after its closest competitor, Fast, was shut down due to high burn.
In the late-stage world, buy now pay later platform Klarna laid off 10% of its workforce and saw its valuation drop by 85% – from $45.6 billion in July 2021 to $6.7 billion in July this year.
