Taxfix leaped to a $1 billion valuation in 2022 on the back of a popular mobile app used by consumers help with tax returns. But fast forward to 2023, and the Berlin-based accounting startup is taking an audit of its own affairs. TechCrunch has learned and confirmed that Taxfix has laid off 20% of its staff — 120 employees — as part of wider restructuring of the business aimed at cutting costs.
The cuts were announced to staff on Tuesday. Pointedly, they are coming in the wake of Taxfix acquiring a rival tax startup in the country, Stuttgart-based tax chatbot Steuerbot — a deal that was announced two months ago.
“With Taxfix’s recent successful acquisition of Steuerbot, great synergies are created, which enable us to heavily increase efficiencies. Therefore we took the strategic decision to restructure the organization,” a Taxfix spokesperson said in an emailed statement. Taxfix originally said it would operate Steuerbot as an independent and complementary subsidiary.
Taxfix had also been actively recruiting just prior to today’s news; now, it no longer lists open positions at the company on its own careers page so it appears that hiring is also frozen.
The sudden changes underscore the pressure that startups are under in the current market.
The most promising of them will have raised big rounds in years past at top valuations to stay in so-called “growth mode” — intentionally remaining unprofitable and investing capital in their market and technology expansion.
But now, with the funding landscape dried up, many of the same startups are being expected to pursue a variety of other courses: conserve the cash they have, cut costs where they can, be prepared to take hits on their valuations if they do need to raise (especially if they’re not tightening their belts), and aim for profitability — all boxes that Taxfix is now aiming to check.
“The macroeconomic funding environment has changed over the past months, and it is, therefore, more important than ever to position ourselves as an independent company for the long term. This entails an even stronger focus of the business activities on sustainable growth and profitability,” the spokesperson said.
Taxfix did not comment on its current runway, nor whether it is currently trying to raise more money.
The last funding the startup raised was just over a year ago, in April 2022, when it closed a $220 million Series D at a valuation of over $1 billion, from an impressive group of investors that included Teachers’ Venture Growth (formerly Ontario Teachers’ Pension Plan Board), Index Ventures, Valar Ventures, Creandum and Redalpine.
In more heady times, you might have expected Taxfix to follow the route of other high-flying unicorns: by now it would have scooped up yet more investors and capital at an even higher valuation to break into more markets and accounting categories. But these days, sounds like there’s a lot riding on just keeping things operating steadily on its own steam.
Taxfix, the $1B German accounting startup, slashes 120 jobs amid funding crunch by Jagmeet Singh originally published on TechCrunch
Source: techcrunch.com