Startup Banking-as-a-service (BaaS) Synctera has undergone a restructuring that has resulted in downsizing, the company confirmed to TechCrunch.
While Synctera did not share how many employees were affected, a report in the Fintech Business Weekly pegs the number at about 17 people, or about 15% of the company. Doing the math, that means the company had about 113 employees before the cuts and about 96 now.
Synctera built a platform designed to connect fintech companies and sponsoring banks. The recently announced $18.6 million expansion round in his own $15 million Series Awhich was announced in March 2023. Then he had also announced the hire of Leigh Gross as the new Chief Revenue Officer and clients of BTG Pactual and Flutterwave.
Investors include; NAventures, the corporate venture arm of National Bank of Canada. Lightspeed Venture Partners; Fin Capital? Banco Popular? and Mana Ventures.
When asked about the job cuts, a company representative wrote via email: “Synctera has undergone a company restructuring that has resulted in staff reductions, and we are committed to helping those affected. We are committed to our current line of business along with adding SaaS offerings for banks and corporates.”
The startup isn’t the only VC-backed BaaS company that has resorted to layoffs to preserve cash recently. Treasury Prime cut half of its 100-person staff in February, one year after the announcement raising $40 million Series C;. And last October, Synapse was backed by Andreessen Horowitz confirmed that he had 86 people were laid off, or about 40% of the company. Figure Technologies, which includes Figure Pay, fired 90 people — or about 20% of its workforce — last July.
In the meantime, Reportedly, Piermont Bank cut ties with the boot unit, FinTech Business reported.
BaaS refers to various types of business models, such as offering banking services to other industry players. or providing the charter and banking services, but not taking on liability; or offering banking components, which is more of a fintech that is not a bank but provides some bank-like services without a charter.
Players in BaaS have faced challenges, especially regulatory crackdowns in 2023. For example, those providing BaaS to fintech partners accounted for over 13% of enforcement actions by federal bank regulators last year, S&P Global Market Intelligence Reports. Unfortunately, startups facing these challenges may have to resort to more layoffs to keep up.
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