2 June 2023, Bengaluru, India
In 2022, Taxfix soared to a $1 billion valuation thanks to a well-liked mobile app that customers utilized for tax return assistance. But in 2023, the Berlin-based accounting company is conducting a self-audit of its operations. TechCrunch has learned and verified that Taxfix has let go of 120 employees, or 20% of its workforce, as part of a larger business restructuring effort to reduce expenses.
The layoffs were disclosed to the workers on Tuesday. They are particularly noteworthy because they follow Taxfix’s announcement two months ago that it would acquire Steuerbot, a rival tax startup in the nation based in Stuttgart.
With the recent and successful acquisition of Steuerbot by Taxfix, we have generated fantastic synergies that allow us to significantly boost efficiency. As a result, we made the strategic choice to restructure the business, according to a Taxfix spokeswoman who provided a statement through email. Steuerbot will be run independently and in addition to Taxfix, as was initially stated.
Before today’s revelation, Taxfix had also been actively hiring; however, because no vacant positions are currently listed on the company’s careers page, it appears that hiring has also been put on hold. The abrupt adjustments highlight the competition startups face in the present industry.
The most promising of them will have raised sizable rounds at top valuations in previous years to continue in so-called “growth mode”—intentionally remaining unprofitable and spending money in their market and technological expansion.
Today, however, many of the same startups are expected to pursue a variety of other paths: conserve the cash they have, cut costs where they can, and be ready 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 tick.
“Over the past few months, the macroeconomic funding climate has shifted, making it more crucial than ever for us to establish ourselves as an independent business. This necessitates an even greater emphasis on sustainable growth and profitability in business operations,” the spokesperson stated.
Neither the length of its existing runway nor if it is currently looking to raise further money were addressed by Taxfix.
The startup’s most recent round of funding came in April 2022, just over a year ago, when it closed a $220 million Series D round from a distinguished group of investors that included Teachers’ Venture Growth (formerly Ontario Teachers’ Pension Plan Board), Index Ventures, Valar Ventures, Creandum, and Redalpine. At the time, the company was valued at over $1 billion.
In more euphoric times, you may have anticipated Taxfix to go the same path as other high-flying unicorns: by this point, it would have snatched up additional investors and funds at an even higher valuation to expand into other markets and accounting categories. However, it seems like a lot depends on keeping things running steadily on their own these days.
[Source: techcrunch.com]
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