We take no joy in reporting that fintech website Nerdwallet has gone through its third round of layoffs this year. The latest included 11% of its staff (53 all told). Now, retail-focused fintechs operate in two worlds, and neither of them is easy. The first is in a bank challenger position, where they are offering access to services that have traditionally (and continue) to be available through banks – loans, credit cards, mortgages and the like. The second is as a consumer website operator, and we are no strangers at FintekNews to the challenges that the media business poses when it comes to audience development and taking advertising market share from the likes of media behemoths Google & Facebook. But what we so often see in these startups is outrageous, massive overstaffing, once the VC starts rolling in. All told, Nerdwallet has raised $69M in VC, and it would be easy to get carried away with all that money in staffing up more quickly than the business warrants, which clearly occurred. Still a great site, though, and we wish them well as they retrench to a smaller, leaner staff.
“Personal finance startup NerdWallet seems to be on the struggle bus, having just laid off 53 people today (about 11 percent of its workforce) due to the fact that the company is not hitting its profitability goals, TechCrunch has learned. As part of the restructuring, NerdWallet’s sales and partnerships teams will be folded into various product teams, a NerdWallet spokesperson told TC.
The layoffs are happening as a result of NerdWallet’s revenue growth decreasing to market conditions. The company is missing its 2017 revenue projections, the company said. NerdWallet CEO Tim Chen sent an email to the staff this morning, notifying them of the layoffs.
“This was an incredibly difficult decision and not one we made lightly,” Chen wrote. “Two factors drove this decision — we’re not hitting our profitability goals, and there are areas within our organization that aren’t running as efficiently as they should be.”
In his email, Chen noted that while NerdWallet did grow this year, the company hit “some unexpected rough patches that impacted our revenue, which taught us an important lesson in budgeting more conservatively moving forward.”
This is the third round of layoffs at NerdWallet this year. In July, NerdWallet laid off six people from its marketing team. In April, NerdWallet laid off more than 40 people, which represented eight percent of its staff. As part of the changes in April, NerdWallet VP of growth Henry Hsu left the company and NerdWallet COO Dan Yoo moved into an advisory role…”
Full Story at TechCrunch