Israeli fintech startup RiseUp has announced that it is laying off 50 out of its 100 employees due to the impact of the war. The war has created uncertainty, which has forced the company to make adjustments both in manpower and in its strategy for recruiting customers, which has not met expectations, pushing up costs for finding new customers since October 7th.
The move does not apparently reflect a lack of cash in the company's coffers, but rather the cuts will allow RiseUp to achieve profitability. At the same time, RiseUp continues to operate and locate investors, with the company due to soon launch in the UK market, and there are also plans for further global expansion.
RiseUp is licensed by the Israel Securities Authority to provide financial information services, and invites the public to join deposits purchasing groups in order to strengthen the power of customers in talks with banks and pension and insurance companies. The move comes following protests by the public that interest rate hikes have not been reflected in the interest rates on deposits offered by the banks.
According to PitchBook, RiseUp has raised $50 million to date, with a valuation of $130 million in its most recent financing round. The main investors include Aleph, Sir Ronald Cohen and Dynamic Loop Capital.
A senior source in the fintech market estimates that RiseUp, like many other tech companies in the field of money management for private savers that charge monthly subscription fees, has encountered difficulty growing. Other companies, such as Mint for example, have not proven that they can provide a competitive service to banks at prices that allow them to grow.
"Committed to the growth plans"
RiseUp said, "Like many startups, RiseUp has been required to make adjustments to its workforce, in order to ensure its growth and profitability even in challenging market conditions, including the ongoing war. Unfortunately, this requires us to say farewell to dedicated and talented friends and team members who have helped RiseUp become a significant fintech platform, which successfully serves tens of thousands of customers, together with additional measures to save expenses and business focus.
"We will provide support to each and every member of the team, and we will work as much as possible to help them continue their professional path. We stress that we and our investors are committed to RiseUp's growth plans with an emphasis on uncompromising service for our customers, companies and members of our community and our many partners. We will continue to help customers and community members to improve cash flow with help from the tools we make available to them."
Published by Globes, Israel business news - en.globes.co.il - on April 30, 2024.
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