“Tech layoffs top 15K in a brutal May”… “Cost cutting, layoffs remain leading startup themes”. These are some examples of the headlines that have been mushrooming in the media.
So I decided to go a step further and analyze the layoff statistics of the VC-backed startups. For that I accessed the site Layoffs.fyi which tracks tech layoffs since the outbreak of Covid-19.
Below I show the list of the 20 startups that laid off more people in 2022 (July 15).
1) Getir – Turkey — Delivery
2) Better.com – US – Consumer Finance
3) Instacart – US – Delivery
4) Bytedance – China & India – Consumer Entertainment
5) PaisaBazaar – India – Consumer Finance
6) Gopuff – US – Delivery
7) Ola – India – Transportation
8) Swiggy – India – Delivery
9) Magic Leap – US — Consumer Entertainment
10) Unacademy – India – Education
11) OneTrust – US – Security
12) CureFit – India — Fitness
13) Klarna — Sweden — Consumer Finance
14) Deliv – US — Delivery
15) Oyo – India — Hospitality
16) Cars24 – India — Transportation
17) MFine – India – Health Care
18) ByBit – Singapore — Crypto
19) Gorillas – Germany — Delivery
20) Zomato – India — Delivery
What do these 20 startups have in common?
* 19 of them are B2C, only OneTrust is B2B
* 19 of them are tech-enabled (where technology is a means and not the core of the offering), only OneTrust is tech
* 14 of them are located outside the US
In retrospective these outcomes were more than expected:
B2C companies are usually more labor intensive and more affected by economy mood swings given the lower stickiness of their customers. Tech-enabled companies hardly build moats. Since VC is a newer activity outside the US, venture capitalists are less experienced and the ecosystems less mature.
Because of evolution, human beings tend to lump and generalize things under a single umbrella. In addition, most media outlets like to sensationalize news in order to sell.
VC is not a single category. B2C is different from B2B. Tech-enabled is different from tech. The US is different from the rest of the world.
Fabrica Ventures focuses on B2B-tech-US VC.