Neobanking Startup Fi Lays Off 10% Of Its Workforce In A Restructuring Exercise

Peak XV Partners-backed neobanking startup Fi is laying off around 10% of its workforce, or around 30 employees, as part of a restructuring exercise.

The layoffs will impact employees across teams. The startup is offering multiple months of severance and will also accelerate ESOP vesting for the departing employees, Fi CEO and cofounder Sujith Narayanan told Inc42 in a statement.

“As a company, we constantly evaluate and adapt to the changing landscape of our industry. We’ve recently undertaken a strategic restructuring, prioritising our focus and resources on key growth areas. This restructuring will enable us to double down on our core product features, streamline operations, and ensure a sustainable future,” Narayanan added.

The development was first reported by Moneycontrol. 

The decision to lay off employees was announced by Narayanan during a town hall meeting, the report said, adding that it would help the startup increase its cash runway to two years.

During the town hall, Narayanan reportedly also said that the startup will slash its marketing and technology costs. 

The development comes almost 15 months after Fi raised $45 Mn in its Series C funding round led by Alpha Wave Ventures. Earlier, the startup, formerly known as epiFi, raised $50 Mn in its Series B round from B Capital Group, Falcon Edge, Peak XV Partners (earlier known as Sequoia Capital), and Ribbit Capital. 

As per media reports, Fi is currently valued at around $700 Mn. 

Founded in 2019 by former Google Pay pioneers Narayanan and Sumit Gwalani, Fi aims to address banking pain points. The extended founding team comes from companies such as Netflix and PayPal, bringing decades of tech and banking experience to Fi.

Fi provides a digital layer over the traditional banking ecosystem. The neobank also launched its iOS app in early 2022 with features such as smart deposits, a digital financial assistant, a debit card, and many more.

Its standalone net loss jumped over 4.8X to INR 244.8 Cr in FY22 from INR 50.1 Cr in FY21, while operating revenue stood at INR 21 Cr as against nil in FY21.

Overall, the startup has raised a total funding of around $168.8 Mn till date. It competes with the likes of Jupiter, Razorpay, Open, Niyo and FamPay.

The amount of investment in neobanking startups has gone up over the last few years as the Indian neobanking market is expected to grow to a market size of $183 Mn by 2030.

The layoffs come amid the ongoing funding winter, which has resulted in Indian startups firing employees in droves. As per Inc42’s layoff tracker, startups in India have laid off over 28,000 employees since last year.

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