Zepz, which owns the WorldRemit and Sendwave manufacturers, has a complete headcount of round 1,600.
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Cash switch group Zepz is shedding 420 workers, the corporate informed CNBC completely, because the fintech sector grapples with a tricky macroeconomic atmosphere.
The London-headquartered firm started informing workers of the redundancies on Monday, with particular person employees being informed by their managers earlier than bigger communications have been issued. By Tuesday, the entire firm had been informed concerning 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 impression Zepz’s buyer care and engineering groups as Zepz appears to shift these operations from a number of international locations to extra centralized hubs, the corporate stated.
The agency is headquartered in London however has regional workplaces in the US, Canada, Australia, Hong Kong, Poland, Kenya, and past.
Zepz stated it was implementing what it referred to as “workforce optimization” to account for roles that had been duplicated following its mixture of Sendwave with WorldRemit underneath one dad or mum firm.
Collectively, each cash switch providers are utilized by greater than 11 million customers throughout 150 international locations. 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 employees. In June 2022, Zepz carried out redundancies affecting round 5% of its workforce, in response to Sky Information.
Mark Lenhard, Zepz’s CEO, stated the choice marked “an essential and essential step in transitioning from two huge, segmented groups to 1 dynamic group underneath Zepz, and laying formidable foundations in direction of our long-term strategic path as a portfolio enterprise.”
He added that the corporate took the choice to scale back its headcount on account of a have to streamline its construction moderately than macroeconomic pressures.
“During the last 12 months we have now taken a critical have a look at easy methods to optimize the group to proceed scaling in a mature style that units up the enterprise for long-term success,” he stated.
“The remittance trade has maintained strong 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 all over the world.”
Staff will likely be supplied assist within the type of counseling, teaching and profession, CV growth, job functions, and interviewing abilities.
Regardless of the job discount measure, Zepz stated it’s nonetheless hiring for 200 roles.
The corporate allows customers to ship cash overseas from a smartphone or laptop with individuals on the opposite finish having the ability to obtain it of their financial institution accounts, by money, to a cellular pockets, or as a cellular airtime top-up.
The service is a challenger to established cash switch providers like Western Union, touting cheaper charges and the power to switch cash quickly. A detailed rival is Smart, 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 firms within the sector — each in the private and non-private markets. Funding has dried up and a number of other fintechs have taken valuation cuts.
Even legacy banks have struggled to realize traction available in the market, 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 corporations together with Leapfrog, TCV and Accel.
“Having hit profitability final 12 months, the Zepz crew has been centered on environment friendly progress and persevering with to construct a big, sustainable enterprise,” Harry Nelis, a accomplice at Accel, informed CNBC.
“Following the acquisition of Sendwave a few years in the past, the subsequent stage within the integration of the 2 firms is to take away the duplication of roles throughout the manufacturers’ places.”
“The crew’s choice to optimise the workforce, whereas a troublesome one, was essential for the enterprise’s long-term progress and we’re assured Zepz will proceed to disrupt the trade,” Nelis added.
Zepz has lengthy been a darling of the U.Okay. fintech scene. It was based in 2010 by British-Somalian entrepreneur Ismail Ahmed, who began the corporate after transferring to the U.Okay. after fleeing civil war-torn Somalia.
Ahmed’s thought 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 government 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 will not be 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 observe to extend revenue margins.”