Fintech Amount cuts around 18% of the workforce

Diving license:

• Chicago-based banking technology provider Amount has cut 18 percent of the workforce, a company spokesman said Monday. With its acquisition of fintech Linear this year, Amount had become a team of 600 people, said CEO Adam Hughes during an interview in May, which means that around 108 employees were cut.
• “Due to the current macroeconomic environment, we have decided to make some proactive adjustments to ensure that Amount’s ability to thrive in the years to come,” Hughes said in a statement on the layoff. “We believe these actions are the sensible thing to do for the company’s long-term health and remain extremely excited about the future.”
• The company had about 600 employees last month, with offices in Chicago, Los Angeles, Virginia and New York City, Hughes said in May.

Diving insight:

Amount joins PayPal, Klarna, Bolt and Coinbase to cut jobs in recent months as payment and fintech companies face macroeconomic pressure. Higher inflation and interest rates have been combined with a fall in stock market valuations, which has caused venture capitalists to tighten their wallets.

Swedish buy-now-pay-later supplier Klarna cut around 700 workers last month. San Francisco-based cash startup Bolt cut about a third of the workforce, or 250 employees, Bloomberg reported.

The amount, which has received $ 289 million in risk financing, was originally a spin-off of the direct-to-consumer lending platform Avant. In 2020, it was spun out and renamed Amount. The company raised nearly $ 100 million in 2021, giving it a value of $ 1 billion.

The company spokesman said that Amount did not close any offices as part of the reduction, and would not comment on the types of jobs being cut.

As banks have tried to digitize their offerings, Amount has provided the technology that drives the digital side of traditional bank branch products such as personal loans and credit cards, as well as facilitating buy-now-pay-later financing for banks.

Amount’s customers include financial institutions that together manage more than $ 3 trillion in US assets. It has about 24 direct partnerships with banks, as well as partnerships with payment companies such as Mastercard and Fidelity National Information Services, Hughes said in May.

In February, Amount Reston, Virginia-based Linear, acquired a $ 175 million cash and stock platform for small and medium-sized businesses for loans and account creation. It took on Linear’s 190 employees and renamed that part of Operation Amount Small Business.

Hughes said in May that the amount was well capitalized, with “tons of runway”. The company’s “core priority” in the first half of the year was to ensure that the integration of small businesses was “home ground,” he said. Management “definitely looked at” more acquisitions and expected to be “proactive” in the second half of the year, Hughes said at the time.

“The market is a bit turbulent right now, so we feel very lucky to have good investors,” Hughes said in May.

At the time, Hughes said a public exit was not planned for Amount this year, but the startup aims to continue “making progress on the product roadmap” and adding partnerships. This focus would give the company “some great choices, whether it’s a public outlet or a really attractive acquisition target for someone,” he said in May.

The company’s priority “remains the same, which is to execute smart strategies that promote top-line growth, rapid innovation and unlock value” for banking partners, the spokesman said on Monday.