Banking-as-a-service startup (BaaS) Synctera has undergone a restructuring process resulting in a reduction of its workforce.
Although Synctera did not disclose the exact number of employees affected, a report from Fintech Business Weekly estimates the impact to be around 17 individuals, constituting approximately 15% of the company’s workforce. This adjustment indicates a decrease from about 113 employees before the restructuring to around 96 afterward.
Synctera developed a platform aimed at connecting fintech firms with sponsor banks. It recently announced an extension round of $18.6 million following its $15 million Series A round, which was publicized in March 2023. Concurrent with this announcement, the company introduced Leigh Gross as its new chief revenue officer and listed BTG Pactual and Flutterwave as its customers.
Investors in Synctera comprise NAventures, the corporate venture arm of a Canadian national bank; Lightspeed Venture Partners; Fin Capital; Banco Popular; and Mana Ventures.
In response to inquiries regarding the workforce reduction, a spokesperson for the company conveyed via email: “Synctera has undertaken a restructuring initiative resulting in staff reductions, and we are committed to supporting those affected. We remain dedicated to our existing business line while also adding SaaS offerings for banks and enterprises.”
Synctera is not the sole venture capital-backed BaaS company to implement workforce reductions recently to manage finances. Treasury Prime reduced its workforce by half in February, approximately one year following a $40 million Series C funding round. Additionally, in October, Synapse, backed by Andreessen Horowitz, confirmed an 86-person workforce reduction, amounting to approximately 40% of its employees. Figure Technologies, inclusive of Figure Pay, laid off 90 employees, equivalent to around 20% of its workforce, in July of the previous year.
Furthermore, Piermont Bank reportedly severed its ties with the startup Unit, as reported by Fintech Business Weekly.
BaaS encompasses various business models, such as providing bank-like services to other industry players, offering banking components, or furnishing charter and bank services without underwriting.
Companies operating in the BaaS sector have encountered challenges, particularly regulatory scrutiny in 2023. According to S&P Global Market Intelligence, providers offering BaaS to fintech partners accounted for over 13% of severe enforcement actions by federal bank regulators last year. Unfortunately, startups navigating these challenges may find layoffs necessary to adapt to the evolving landscape.
