(Reuters) – Online banking company Chime has laid off 12% of its employees, a spokesperson said on Wednesday, blaming “current market dynamics” as this year’s tech rout slams the once-high valuations of growth startups.
The San Francisco-based company slashed about 160 jobs, joining a series of fintechs such as Swedish payments firm Klarna that are looking for ways to cut costs as rampant inflation and the Ukraine crisis worsen business sentiment.
Klarna, once Europe’s most valuable startup, saw its valuation drop to $6.7 billion in July from $46 billion earlier. Buy-now-pay-later company Affirm Holdings has also shed more than 80% of its value so far this year.
The downturn comes after payment companies enjoyed robust growth during the pandemic as consumers embraced digital banking services.
The Information was the first to report about Chime’s job cuts on Wednesday.
Chime makes money by earning a fee from payment processors such as Visa Inc every time a customer uses a Chime debit or credit card. It was valued at $25 billion in a funding round led by Sequoia Capital Global Equities in August last year.
Launched in 2012 by former Visa Inc executive Chris Britt and Comcast Corp alumnus Ryan King, Chime’s competitors include digital banks Revolut, Current and Varo.
Earlier this year, Reuters had reported that Chime could aim for a valuation of nearly $40 billion for an initial public offering in New York.
(Reporting by Mehnaz Yasmin in Bengaluru; Editing by Devika Syamnath)
