Israeli Startup Santa will be sacking most of its employees, according to a statement from the company
- ByStartupStory | December 6, 2022
Israeli startup Santa is laying off most of its employees in a move to return the money it raised to its investors. Santa was founded in 2020 by CEO Roee Adler, a former SVP at WeWork, COO Menachem Katz, Head of WeWork Food Labs, and Shai Wininger, the co-founder of insurtech company Lemonade. Santa was launched with the aim of becoming a digital gifting retailer that offers curated assortments of apparel, accessories, wellness, and tech, through its app, which can then be delivered directly. The company raised $13 million led by Aleph at a $40 million valuation. It employs several dozen employees, mostly in Tel Aviv.
“Dear friends, today I have some difficult news to share,” Adler wrote on social media. “We started Santa two years ago with an ambitious vision, a strong team, and great support from top investors. Within 10 months we built and launched a complex product, bringing a new kind of digital/physical shopping experience to people’s front doors. Customers loved it and revenues were growing.”
However, Adler noted that the company “also learned that creating the level of service we wished for comes at a cost that results in unsustainable unit economics, in a way that has a very low likelihood of being resolved at scale.”
“Santa is a well-funded company with most of the funds raised still in our bank account, and we have the best investors entrepreneurs can hope for, investors who supported our ambitions and helped us aim for the stars,” he added. “Our commitment to them as founders is to protect their capital and put it to the best use we can imagine. It’s easy to confuse money-in-the-bank with business success, but it’s our responsibility to acknowledge fundamental issues and act swiftly and decisively, instead of continuing to throw money away on trying to fix the unfixable.”
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