Cash switch group Zepz is shedding 420 staff, the corporate instructed CNBC solely, because the fintech sector grapples with a tricky macroeconomic atmosphere.
The London-headquartered firm started informing staff of the redundancies on Monday, with particular person workers being instructed by their managers earlier than bigger communications have been issued. By Tuesday, the entire firm had been instructed in regards to the transfer.
Zepz, which owns the WorldRemit and Sendwave manufacturers, has a complete headcount of round 1,600, that means the cuts translate to about 26% of its workforce.
The reductions will primarily influence Zepz’s buyer care and engineering groups as Zepz appears to be like to shift these operations from a number of nations to extra centralized hubs, the corporate stated.
The agency is headquartered in London however has regional places of work in america, Canada, Australia, Hong Kong, Poland, Kenya, and past.
Zepz stated it was implementing what it known as “workforce optimization” to account for roles that had been duplicated following its mixture of Sendwave with WorldRemit below one mother or father firm.
Collectively, each cash switch companies are utilized by greater than 11 million customers throughout 150 nations. Sendwave was acquired by Zepz in 2020 for an undisclosed sum.
It’s the second time in slightly below a 12 months that Zepz has laid off workers. In June 2022, Zepz carried out redundancies affecting round 5% of its workforce, in keeping with Sky Information.
Mark Lenhard, Zepz’s CEO, stated the choice marked “an vital and obligatory step in transitioning from two huge, segmented groups to at least one dynamic group below Zepz, and laying bold foundations in direction of our long-term strategic route as a portfolio enterprise.”
He added that the corporate took the choice to cut back its headcount on account of a must streamline its construction slightly than macroeconomic pressures.
“During the last 12 months we have now taken a critical take a look at the way to optimize the group to proceed scaling in a mature vogue that units up the enterprise for long-term success,” he stated.
“The remittance trade has maintained sturdy progress regardless of world financial situations, and we have seen this viewers take nice measures to make sure their family members are supported as prices rise world wide.”
Staff might be provided help within the type of counseling, teaching and profession, CV improvement, job functions, and interviewing abilities.
Regardless of the job discount measure, Zepz stated it’s nonetheless hiring for 200 roles.
The corporate permits customers to ship cash overseas from a smartphone or pc with individuals on the opposite finish having the ability to obtain it of their financial institution accounts, by money, to a cell pockets, or as a cell airtime top-up.
The service is a challenger to established cash switch companies like Western Union, touting cheaper charges and the power to switch cash quickly. An in depth rival is Sensible, which claims to supply cheaper worldwide cash transfers than the banks.
Fintechs like Zepz are dealing with a spread of challenges together with extra cost-conscious customers and heightened regulatory scrutiny. These have hit the worth of assorted corporations within the sector — each in the private and non-private markets. Funding has dried up and several other fintechs have taken valuation cuts.
Even legacy banks have struggled to realize traction out there, with Goldman Sachs not too long ago pulling again on its fintech ambitions.
Zepz final raised money in August 2021 at a $5 billion valuation when it introduced $292 million of latest funding from buyers led by the hedge fund Farallon Capital. The startup is backed by main enterprise capital companies together with Leapfrog, TCV and Accel.
Zepz has lengthy been a darling of the U.Ok. fintech scene. It was based in 2010 by British-Somalian entrepreneur Ismail Ahmed, who began the corporate after transferring to the U.Ok. after fleeing civil war-torn Somalia.
Ahmed’s concept for creating Zepz, then WorldRemit, stemmed from his personal expertise transferring cash throughout rising markets; he would switch funds to his household, who then lived in a refugee camp in Ethiopia, however the transfers have been costly and took months to finish.
Ahmed stepped down as Zepz’s CEO in 2018, although he stays on the board as non-executive chairman. His substitute on the time was Breon Corcoran, an Irish businessman who previously led British betting firm Paddy Energy Betfair.
In 2022, Corcoran was changed by Mark Lenhard, a former govt at invoice funds agency Invoice.com, whose appointment reportedly got here because the prospects of an preliminary public providing for the corporate had waned.
Lenhard stated that Zepz “by no means introduced a timeline for IPO and usually are not planning to announce exit plans presently.” The corporate achieved working profitability within the first half of 2022, he stated, including that it’s “on a sustainable monitor to extend revenue margins.”
