Fi, Backed by Peak XV and Temasek, Undertakes Layoffs to Extend Cash Runway
- ByStartupStory | September 28, 2023
Fintech startup Fi, backed by investors like Peak XV (formerly Sequoia’s India arm), Temasek, and Alpha Wave Ventures, is taking measures to extend its cash runway to 2 years amid challenging funding conditions. The neobanking company announced that it will lay off approximately 10 percent of its staff, affecting around 30 employees. Additionally, senior management personnel will take pay cuts to reduce costs. Fi aims to optimize its marketing and technology expenses and shift its focus away from products and verticals that aren’t generating revenue.
Fi co-founder Sujith Narayanan emphasized the importance of having a 2-year cash runway and acknowledged that the company was approximately 30-40 percent behind its revenue targets for the first half of the year. While the mutual funds product showed promise, the launch of investments in US stocks was delayed due to compliance matters, and loan disbursals were underperforming.
Fi was last valued at $520 million in a funding round in July 2022. According to data from PrivateCircle Research, the neobanking company reported revenues of Rs 67 lakh in FY20, Rs 1.27 crore in FY21, and Rs 25.6 crore in FY22, with losses of Rs 9 crore in FY20, Rs 50 crore in FY21, and Rs 245 crore in FY22. Fi has applied for an NBFC (non-banking financial company) license, expecting approval within the next 5-6 months.
Narayanan explained that Fi had recently undergone a strategic restructuring to focus on key growth areas, impacting around 10 percent of the workforce. The departing employees will receive support, including several months of severance, extended healthcare provisions, and extended ESOP vesting. Fi has partnered with Federal Bank to allow customers to open bank accounts while Fi manages the app and related services. The neobank competes with Jupiter, another neobank backed by Peak XV.
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