San Francisco-based fintech startup Synapse has recently confirmed that it has laid off 86 employees, which accounts for approximately 40% of the company’s workforce. The company, backed by Andreessen Horowitz (a16z), specializes in banking-as-a-service and offers a platform that enables financial institutions and fintech companies to easily develop and integrate financial services.
Key Takeaway
Synapse, a fintech company backed by a16z, has recently undergone significant layoffs, reducing its workforce by 40%. These layoffs are deemed necessary due to the impact of macroeconomic conditions on its clients and platform. The company aims to move forward with a dedicated team to support its operations and customers in the future.
Previous Layoffs and Impact of Macroeconomic Conditions
This is not the first time Synapse has experienced layoffs. In June, CEO Sankaet Pathak had acknowledged letting go of 18% of the workforce due to the adverse effects of current macroeconomic conditions on the company’s clients and platforms. In his blog post, Pathak mentioned that the anticipated growth of the company had been influenced by these external factors.
A Synapse spokesperson expressed remorse over the departure of talented team members and highlighted their commitment and contributions to the company. However, the spokesperson assured that the remaining staff is well-equipped to manage operations and provide ongoing support for customers. The spokesperson did not provide any additional information beyond what had been previously reported.
Reports of Client Non-Renewal and Further Layoffs
Jason Mikula, publisher of Fintech Business Weekly, recently shared on X that Synapse’s notable client, Mercury, had given notice of non-renewal and expressed plans to transition directly to the platform provided by Evolve. Furthermore, Mikula mentioned hearing about potential layoffs affecting at least 130 employees, indicating a broader impact on the company’s operations.
Synapse’s Funding History
When SynapseFi rebranded as Synapse in 2019, the company secured a Series B funding round of $33 million, led by venture capital firm Andreessen Horowitz. This marked the most recent known financing activity for the company. Synapse has raised a total of just over $50 million in venture capital since its establishment in 2014.
Fintech Business Weekly publisher Jason Mikula’s observations on client non-renewal and rumors of additional layoffs indicate further challenges faced by Synapse as it navigates the competitive fintech landscape. Despite a previous successful funding round and securing prominent clients, the company is now facing uncertainty amidst a rapidly evolving industry.
