INSUBCONTINENT EXCLUSIVE:
TechCrunch confirmed today that BounceX (the firm is rebranding this year) has executed layoffs and salary cuts in the wake of recent
COVID-19-led economic disruptions.
Many startups are undergoing staff cuts as the domestic and global economies slow, making individual
reductions less newsworthy as the layoff tally rises
However, as BounceX is a company we&ve recently highlighted for its growth and capital efficiency, its own cuts are worth
noting.
Reductions
TechCrunch was tipped concerning the BounceX staff cuts and salary reductions earlier today, events that the company
Our original tipster pegged the cuts at around 20% of staff, with pay cuts for the rest of its denizens.
The company confirmed the existence
of salary cuts and layoffs, but did not affirm our figures
Here BounceX on its hard day; the firm confirmed pay cuts via a spokesperson separately from this comment:
COVID-19 has hit our client base
really hard, especially if they had significant retail presence
In order to accommodate clients and help stabilize our business - their businesses, we made the immensely difficult decision to move forward
with a reduction in force
While we expected over 30% growth this year and adding 150 new roles by year end, we were forced to consolidate roles in order to do
everything we could to take care of as many of our people as possible and continue to help our clients get through this.
It is not a
surprise that BounceX was planning revenue growth and 150 new roles; the company recently crossed the $100 million ARR threshold, an event
that TechCrunch covered as part of our long-running series focused on companies that reach the revenue threshold.
Indeed, in February, when
BounceX shared the milestone, the firm also announced a rebrand, stating that it would change its name to Wunderkind
As you can read from the name, BounceX was feeling good at the time, looking to the future, proud of its growth and track record of
efficient capital use.
As TechCrunch wrote at the time:
Wunderkind has been super efficient to date, with [CEO Ryan] Urban telling
TechCrunch that &the amount of equity [his company has] actually put to work is probably sub-$35 million,& with less than $50 million in
The company also has debt lines that it can use, the CEO noted.
Given its history of conservative capital management, it doesn&t seem likely
that BounceX is in existential danger after its layoffs
The company debt line — though we don&t know anything about its covenants — could provide more cushion
But its quick turnaround in fortunes shows how fast things can change.
The impact of COVID-19 on BounceX shows that no company, no matter
how successful they were in February, is safe in April
Heck, TripActions was crowing about a huge new debt facility it secured right before COVID-19; the firm has since pared staff as well.
