Spenmo co-founder and chief executive officer Mohandass Kalaichelvan delivered that the company needs to focus on extending its runway as capital dries up.
Heaptalk, Jakarta — Singapore-based payable software startup Spenmo lays off employees blaming the uncertain macroeconomic conditions, as quoted by The Business Time. The decision appeared on November 18, 2022, as part of the effort to extend its cash runway past five years.
A source delivered that 30% of Spenmo’s workforce is affected by the termination, while another said it is about 70 out of over 200 employees. The layoff is not the first time in 2022 as the company has taken the same measure twice in January and June, affecting the credit team and sales team.
Spenmo co-founder and chief executive officer Mohandass Kalaichelvan delivered that the company needs to focus on extending its runway as capital dries up. Based on the calculation, the startup has had adequate capital for over three years. Now, it extends the runway to over five years as suggested by its board and advisers.
“We agree it makes sense to be fiscally responsible in this climate. No one really knows how long this recession will last,” said Kalaichelvan. Before deciding on the layoff, the company has cut costs across the board ranging from hiring freezes to renegotiation expenses, including rental and subscriptions.
However, Kalaichelvan said that the measures will not bring the runway to five-plus years. Therefore, the company decided to let go of some of the staff. Impacted employees will get undisclosed retrenchment benefits, accelerating the cliff period for employee share options, the equivalent of three months’ insurance premiums in the final payments, outplacement services, and relocation allowance for work visa holders.
Expansion to Indonesia in 2021
The remaining capital is now being allocated to a smaller number of growth areas, spanning locally issued cards, a deeper focus on accounts payable workflow for larger companies, and investment into integration for larger enterprise resource programs.
Although the monetization of the software-as-a-service (SaaS) business will take longer, it will be much stickier and less volatile compared to today’s fintech revenue. “We have implemented big pricing changes and recent cohorts are looking better than ever. The future is bright if we continue to execute relentlessly,” said Kalaichelvan.
Spenmo provides a spending management platform for corporates, spanning company cards, local and overseas invoice payments, approval-based spending, and accounting automation. In January 2022, the startup bagged US$75.5 million in a series B round led by Tiger Global.
Afterward, the company appointed Kevin Fitzgerald as its first chief revenue officer (CRO) on March 7, 2022. Spenmo announced its first operation in the Philippines in April 2022, following the expansion to Indonesia in 2021.
