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London-based Truelayer cuts a quarter of staff, loses unicorn status in new funding round

2025-04-01 04:22:55 By

Canary Wharf and the City of London skyline

Truelayer, once a celebrated fintech 'unicorn', has made the drastic move of cutting approximately a quarter of its workforce in a single day. This is part of a broader strategy to reduce costs and steer towards profitability, according to City AM.

The London-based company let go of 71 roles at the end of September, just a week before announcing a $50m funding round that saw its valuation take a hit, as per two individuals privy to the situation.

Insiders revealed that employees were given a mere two-hour notice for a meeting where they were informed about the job cuts. The affected staff members reportedly exited the company on the same day.

An internal source disclosed that around 25% of the workforce was impacted by this decision.

When approached for comment, a Truelayer spokesperson chose not to delve into specifics. They instead highlighted the recent funding round as "yet another vote of confidence in our company."

They further added: "At the same time, we also announced important steps to chart our path toward profitability, including streamlining operational costs and a reduction in headcount which took place in September,".

The latest fundraising round saw Truelayer's valuation drop by roughly 30%, stripping it off its coveted 'unicorn' status, which it had achieved in a 2021 round with a price tag exceeding $1bn.

This trend of accepting lower valuations to secure funds has been observed among several major European fintechs over the past couple of years, as they grapple with the challenge of achieving profitability to meet venture capital investors' expectations.

Francesco Simoneschi, CEO of the open banking firm Truelayer, expressed to City AM in June that the "funding environment is way tighter than it used to be". In an October LinkedIn update, he disclosed the company had undergone restructuring and decreased its workforce to enhance its financial position.

Founded in 2016, Truelayer provides payment solutions via open banking technology for clientele such as Revolut, Coinbase, and Shopify. The enterprise boasts investment from entities such as Tiger Global in New York and leading fintech enterprise Stripe.

The latest redundancies follow a fluctuating pattern of recruitment and turnover at the financial technology firm over the last three years.

Truelayer's annual reports detail a reduction in headcount to an average of 346 per month in 2023, down from 434 in 2022 the same year the company dismissed 10% of its workforce. This downsizing was subsequent to a period of aggressive hiring that nearly doubled the workforce from 231 in 2021.

The push to streamline costs reflects a broader change in the sector away from a 'growth at all costs' approach that reached its zenith in 2021. During that time, historically low interest rates led investors to funnel capital into unprofitable start-ups that promised to reconfigure the fintech landscape.

Despite Truelayer managing to lessen its operating losses last year, they still amounted to £54.1m, with administrative expenses of £61.9m eclipsing the tripling of revenue and doubling of payment volumes.

Simoneschi has previously articulated that Truelayer's vision as an "infrastructure business" necessitates considerable expenditure in order to establish a widespread network for open banking adoption across the UK.

The technology has the potential to facilitate payments directly between bank accounts, circumventing card networks that are predominantly controlled by Visa and Mastercard. TrueLayer is part of a group of British open banking fintechs positioning themselves as challengers to this duopoly.

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