Are startups prepared for recession and no-layoff?
hypothetical question: Are startups prepared for recession? Which one is most prepared? I did a bit research by myself, folks can add more comments, might be useful information. I can add more if folks can help naming startups. Probably I should add other dimensions such as expansion rate etc. I don't have good idea now, folks probably can chime in with ideas. last update: 2022/1/23: added bolt though cannot change the poll, consider to repost in future. 2022/2/2: added chime Instacart: 1. has history of layoff, reading the news, shoppers are laid off, no news on engineers layoff, https://www.crunchbase.com/organization/instacart/signals_and_news 2. latest funding $232M (2021/11) at valuation $39B (total funding $2.9B), source https://www.crunchbase.com/organization/instacart/company_financials 3. 2020 ARR $1.5B, 2020 profit $50M, source https://www.businessofapps.com/data/instacart-statistics/ 4. sensitive to inflation: human labor heavy Databricks: 1. no layoff history; seems prepared, raised fund and saved cash, not laying off people during early 2020 market crash, source https://www.cnbc.com/2020/06/16/databricks-prepared-for-recession-with-fundraising-real-estate-cuts.html 2. latest funding $1.6B (2021/8) at valuation $38B (total funding $3.5B), source https://www.crunchbase.com/organization/databricks/company_financials 3. 2021 ARR $600M, profit unknown, source https://www.forbes.com/sites/kenrickcai/2021/08/31/databricks-series-h-38-billion/?sh=76a8839238b3 4. sensitive to recession: company might cut spend on databricks Nuro: 1. no layoff history 2. latest funding $600M (2021/11) at valuation $8.6B (total funding $2.1B), source https://www.crunchbase.com/organization/nuro-2/company_financials 3. ARR unknown, profit unknown 4. sensitive to recession and inflation: still in product-market fit stage, not in scale yet. Stripe: 1.no layoff history 2.latest funding $600M (2021/3) at valuation $95B (total funding $2.2B), source https://www.crunchbase.com/organization/stripe/company_financials 3. 2020 revenue $7.4B, source https://www.wsj.com/articles/how-payment-processor-stripe-became-silicon-valleys-hottest-startup-11618306201 4. seems doing OK during recession and inflation Plaid: 1. no layoff history 2. latest funding $425M (2021/4) at valuation $13.4B (total funding $734M), source https://www.crunchbase.com/organization/plaid/company_financials 3. 2020 Revenue 170M, source https://craft.co/plaid 4. seems doing OK during recession and inflation Brex: 1. no layoff history; seems prepared https://techcrunch.com/2020/05/19/brex-brings-on-150m-in-new-cash-in-case-of-an-extended-recession/ 2. latest funding $300M (2021/10) at valuation $12.3B (total funding $1.5B), source https://www.crunchbase.com/organization/brex/investor_financials 3. revenue $90M/year, source https://growjo.com/company/Brex 4. seems sensitive to recession and inflation: less smaller companies? large companies use large banks. Bolt: 1. no layoff history found; 2. latest funding $355M (2022/1) at valuation $14B (total funding $963M), source https://www.crunchbase.com/organization/bolt-5/company_financials 3. revenue $50M/year, source https://www.pymnts.com/news/investment-tracker/2021/headless-commerce-startup-bolt-eyes-14b-valuation/ 4. seems doing OK during recession and inflation: people need shopping anyways. 5. competitors: stripe, maybe PayPal as well, https://craft.co/bolt-2/competitors, another big competitor is Amazon I think, since bolt is used at sites not on Amazon. Chime: 1. no layoff history found 2. latest funding$750M (2021/8) at valuation $25B (total funding $2.3B), source https://www.crunchbase.com/organization/chime-2/company_financials 3. revenue $900M 2021, source https://www.forbes.com/sites/jeffkauflin/2021/10/23/chime-in-talks-to-go-public-at-35-to-45-billion-valuation/?sh=2c97de7432ff 4. seems doing OK during recession and inflation: people need banking service anyways, free is always more attractive. 5. competitors: this space is a bit crowded, quite a few players https://www.g2.com/products/chime-chime/competitors/alternatives https://craft.co/chime/competitors folks please chime in if you know this industry. #instacart #databricks #nuro #stripe #plaid #brex #bolt #chime TC: 400K
To be honest here. My goal is going to FANG rather than stay at self driving industry. Trying to jump the ship by March. I have the feeling we might hit recession in June July this year.
Is self driving industry that bad? At least Cruise is backed by GM, should be safe boat. Not sure FANG will do better during recession, especially with the regulation pressure.
We lay-off 8% when pandemic hit in 2020. So laying off is just a safe step every start-up regularly does.
Any company using humans ( Uber Lyft instacart) will be in bad situation when inflation high, they are less capable transfer cost to customers
Much of our revenue is a % of grocery prices (retailer fees, service fees, etc) so…. Don’t think we’re in the same boat as ride-sharing since grocery inflation means more revenue for us
Grocery inflation means people will do less shopping and are more likely to go shopping in person rather than paying the fee to Instacart. Inflation will be bad for Instacart for sure.
are we not already in a recession? inflation is sky high and interest rates are only going to go up... the money printer went BRRRRRRR
Well.. many startups will die or get acquired if we have a recession that lasts a minimum of 2 years. Especially many shitty SaaS companies like Asana etc. They are best example of “your scratch my back I scratch yours” kinda product. So many companies have Asana licenses and don’t even use them. And the billionaire CEO pumping stock at high prices. House Of Cards!!!
Those layoffs are shoppers who unionized or something, there has never been layoffs for engineers or corporate
What about Bolt? The 4 day posterchild. And gopuff
OP - mind adding Chime's numbers as well? I have an upcoming interview
So, only instacart and databricks didn't layoff, YET.
No guarantees, but Ali Ghodsi is as much of a market pessimist as they come, raising money for rainy days with an impressive war chest. While there could still be layoffs, it would be surprising honestly.
it's always good to have responsible leadership!
Keep drinking the Kool aid