Israeli fintech company Fundbox today informed 40% of its employees in Israel and the US that they are being laid off, subject to a hearing. Fundbox has 360 employees, so it plans shedding 150 employees.
Fundbox, which provides credit to small and medium sized businesses in the US, is the latest Israeli startup to make major staff cuts in recent months. This week alone cybersecurity company Snyk and vision aid company Orcam and digital health company Antidote have announced major layoffs.
In November 2021, Fundbox completed a $100 million financing round at a company valuation of $1.1 billion, after money.
Fundbox says that it still has $100 million in cash in its coffers and that the latest streamlining measures will allow it to focus on its core business of providing credit to businesses, while reducing activities in developing new products that have yet to prove they can make a significant contribution to the company.
Fundbox CEO Prashant Fuloria wrote, "This is a very painful change, especially for our colleagues who will be directly affected. However, this is a necessary step to strengthen the foundations of our business so that we can implement our mission of helping small businesses to fulfill their financial needs."
He added, "Our business has grown rapidly over the past two years and we have grown our team accordingly. We hired colleague who have contributed greatly to our progress. But the truth is that we grew our team too quickly and we of course have to correct that."
Fundbox was founded in 2012 by Eyal Shinar, Yuval Ariav and Tomer Michaeli. Shinar, a former VP of Battery Ventures investment firm, served as Fundbox's CEO until June 2020 when he became chairman and handed over the reins as CEO to Prashant Fuloria, who had previously been the company's COO. Fuloria is an Indian-born American who has previously worked for Google, Facebook and Yahoo! Ariav and Michaeli are no longer active in the company.
Fundbox's first product was providing credit to small businesses against invoices for future payment - a bridging loan against invoices to be paid after 60 and 90 days. Over the time the company has expanded its product offerings to provide credit lines and other loans to businesses of up to $100,000. The loans target people unable to obtain bank credit due to an insufficient financial history, for example. Private loan providers are able to extend credit much more quickly than banks and Fundbox is able to transfer money into the lenders account within a day.
Published by Globes, Israel business news - en.globes.co.il - on October 25, 2022.
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