Fintech Startup Fam Faces Layoffs and Restructuring Amidst Funding Challenges

• ByStartupStory     |    August 3, 2023

Fam, a fintech startup, had to let go of 18 employees from various departments like growth, engineering, product, and design, according to cofounder Sambhav Jain’s post on X microblogging platform.cofounder Sambhav Jain said in a post on microblogging platform X.“One of the most difficult things to do as a founder is to let people go. Today was a tough day as we had to let go of 18 members of Fam across functions. Parting ways is never easy, especially for a people-first organisation like ours, where everyone is emotionally connected,” said Jain on Wednesday. Jain expressed that it was a difficult decision as they value a people-first culture, making it emotionally challenging for everyone involved.

The company faced its first restructuring in April of the same year, which affected about 10 employees, including some senior leaders. Jain mentioned that the shift in the company’s focus from hyper-growth to sustainability led to these layoffs as they couldn’t provide roles that aligned with personal growth and passion for these employees.

Given the shift in focus of the company from hyper-growth to sustainability, we wouldn’t have been able to provide these people with a role in the company that could justify their personal growth, could fuel the fire to their passion, and most importantly joy at work,” Jain said.

Fam, backed by Elevation and Peak XV, raised $38 million in its Series A funding round in 2021. However, since then, the company has struggled to establish a sustainable revenue model and has faced operational difficulties. The current macroeconomic conditions have forced several startups to focus on profitability due to reduced funding opportunities.

Amidst these challenges, Fam also lost its major banking partner, IDFC Bank, leading them to partner with non-banking finance company TrioTech for their user wallet program. Interestingly, both Fam’s cofounders, Jain and Kush Taneja, are promoters of TrioTech.

Despite raising a total of $43 million so far, Fam has been unsuccessful in securing a new funding round for over a year, reflecting the cautious approach of investors during the current downcycle. The company’s journey has been marked with ups and downs, and they are now facing the reality of reevaluating their business strategies and priorities.

Follow Startup Story