Banking-as-a-service startup (BaaS) Synctera has conducted a restructuring that has resulted in a staff reduction, the company confirmed to TechCrunch.
While Synctera did not share how many employees were impacted, a report in Fintech Business Weekly pegs the number to be about 17 people, or about 15% of the company. Doing the math, that means the company had about 113 employees prior to the cuts, and about 96 now.
Synctera built a platform designed to bring together fintech companies and sponsor banks. It recently announced an $18.6 million extension round to its $15 million Series A, which was announced in March of 2023. At that time, it also announced the hiring of Leigh Gross as its new Chief Revenue Officer and BTG Pactual and Flutterwave as customers.
Investors include NAventures, the corporate venture arm of National Bank of Canada; Lightspeed Venture Partners; Fin Capital; Banco Popular; and Mana Ventures.
When asked about the job cuts, a company spokesperson wrote via email: “Synctera has conducted a restructuring of the company that resulted in a reduction in staff and we are dedicated to assisting those who are impacted. We are committed to our current line of business along with the addition of SaaS offerings for banks and companies.”
The startup is not the only VC-backed BaaS company to have resorted to layoffs to preserve cash recently. Treasury Prime slashed half its 100-person staff in February, a year after it announced a $40 million Series C raise. And last October, Andreessen Horowitz-backed Synapse confirmed that it had laid off 86 people, or about 40% of the company. Figure Technologies, which includes Figure Pay, laid off 90 people — or about 20% of its workforce — last July.
Meanwhile, Piermont Bank reportedly cut ties with startup Unit, FinTech Business reported.
BaaS refers to various types of business models such as offering bank-like services to other players in the industry; or providing the charter and bank services but not doing the underwriting; or offering banking components, which is more of a fintech that isn’t a bank but provides some bank-like services without a charter.
Players in BaaS have faced challenges, especially regulatory crackdowns in 2023. For instance, those providing BaaS to fintech partners accounted for over 13% of severe enforcement actions from federal bank regulators last year, S&P Global Market Intelligence reports. Unfortunately, startups navigating those challenges may need to resort to more layoffs to keep up.
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