Stripe has laid off some of the employees that support TaxJar, a tax compliance startup that it acquired last year, TechCrunch has learned from multiple sources and firsthand documentation.
The layoffs – conducted over the last month – are related to Stripe’s decision to wind down TaxJar-focused go-to-market efforts in late July. Sources estimate the number of employees impacted by the workforce reduction is between 45 to 55 folks, at least a portion of whom were invited to take 30 days to apply to internal jobs at Stripe.
TechCrunch reached out to Stripe for confirmation and a spokesperson said the company declined to comment. According to LinkedIn, TaxJar’s co-founder Matt Anderson left Stripe in July, followed by folks in the sales, marketing and partnerships teams. Anderson did not immediately respond to request for comment
Stripe bought TaxJar, a provider of a cloud-based suite of tax services – in April 2021 to help its customers “automatically calculate, report and file sales taxes.” At that time, Stripe told TechCrunch that all 200 employees of the Massachusetts-based business were joining the company. The goal of the acquisition was to integrate sales tax collection and remittance as a service, one of the most requested features among users.
In July, Stripe went through a 409A valuation process that saw its internal valuation cut by 28%. The rich company is valued by investors at $95 billion, but the implied new internal share price is around $74 billion. While valuation cuts are often viewed as a negative event for a company – industry experts argued that a lower 409A valuation – which is set by a third party and is different from what venture capitalists measure – makes it cheaper for employees to exercise vested options.
Fintech hasn’t been immune from the downturn – for evidence, you need to look no further than the stock prices of Block (formerly Square) PayPal, Robinhood and Affirm. Global fintech funding in the second quarter of 2022 fell 33% to $20.4 billion across 1,225 deals in Q2 from Q1 2022, per CB Insights, and declined nearly 46% from the $37.6 billion raised across 1,287 deals in Q2 2021.
It’s a similar story looking at some players within the startup world. On Deck, a venture-backed startup accelerator that invests in other companies, recently cut 25% of staff and scaled back its accelerator program. Then, months later, it cut a third of staff. MainStreet, fresh off of layoffs itself, underwent a recapitalization from some investors. The company was just valued at $500 million last year for its platform that helps startups uncover tax credits.
Also, one-click checkout startup Bolt laid off at least 180 employees and counting across go-to-market, sales and recruiting roles. That move came just a month after its closest competitor, Fast, shut down due to high burn.
In the late-stage world, buy now pay later platform Klarna laid off 10% of its workforce, and then had its valuation slashed by 85% – from $45.6 billion in July of 2021 to $6.7 billion in July of this year.