The startup’s CFO is leaving to join Rippling, which recently moved into a cost management position.
Enterprise cost management start up Brakes The company exclusively told TechCrunch that it is laying off 136 people, or 11% of its workforce, as part of the restructuring.
After the layoffs, Brakes has more than 1,150 employees.
It’s been a tumultuous year for Brax, who announced in April that he was. Leaning into the company’s department. The company announced that this new focus will be announced in June They no longer work with small businesses or startups that are not professionally funded.. The latest news It caused a bit of a stir — and some feelings of abandonment — in the startup community, which is what Brakes originally set out to serve.
Internally, the move appears to have reduced demand for certain internal staff focused on serving those SMBs. Bracks said he initially tried to “reclaim” as many roles as he could before deciding he had to let some people go.
Layoffs aside, they are evidence that even DecaCorn is not immune to the challenging macro and fiscal environment that 2022 will bring us. It was just nine months ago that Brax had confirmed he had it. He collected 300 million dollars in a Series D-2 round valued at $12.3 billion. GreenOx Capital and TCV led that financing, bringing the three-year-old San Francisco-based startup to a total of $1.2 billion.
Unsurprisingly, Bracks cited the challenging macro environment in his decision.
In a blog post, co-founder and CEO Pedro Franceschi He wrote:
At the end of last year, we decided to narrow our focus and serve a few clients properly. Today’s change is a continuation of this. This year has been laser-focused on serving early-stage startups and established companies, and we’re grateful for the momentum we’ve seen at Empower since we launched in April.
While we are fortunate to be in a strong financial position with several runways, the new macro environment is materially different from the first five years of Brax, and warrants a new level of focus and financial discipline. We know the importance our customers place on Brax’s financial strength, and this transformation will put us on a path to sustainable profitability over the next few years.
Over the summer, Sam Blond left his role as chief revenue officer at Brakes to become an investor in Founders Fund. His replacement, Doug Adamic, has more than 16 years of experience at SAP/Concur — most recently as that company’s chief revenue officer — and will be helping with enterprise sales, according to the company.
As sources recently told TechCrunch Adam Swiecicki is stepping down from his role as chief financial officer at Brakes, a position he held at the end of last year when Michael Tanenbaum took over as chief operating officer. He joins staffing platform Rippling, which recently moved into the cost management space as CFO. Brakes confirmed Switchy’s future, with co-founder and CEO Henrik Dubugras telling TechCrunch: “We’re excited for Adam in his next role and it’s always great to see our team landing with great companies.” Rippling is a Brax partner and focuses on the small business market, while Brax has scaled up. Alongside us, Michael Tanenbaum will continue in his role as CFO.
Going forward, Tannenbaum — who began serving as CFO in early 2017 — will serve in both positions. Swichicki’s decision to leave was said to have nothing to do with his firing.
In an attempt to soften the blow for laid-off workers, Brakes spoke to injured workers. For each completed year of service he receives an additional two weeks of eight weeks’ pay. For those with less than a year in the company, the startup is throwing a cliff of equity. And for those who have options, it offers to extend the exercise period to seven years.
Affected employees will receive periodic health care benefits at the end of the month, and Brecks said he will pay for six months of health insurance. The company said it was dedicating a portion of its recruiting team to help those affected “find new opportunities” and would prioritize rehiring “as roles become available over time.”
Additionally, Brax is allowing all affected employees to keep their computers.
Brax started life offering credit cards aimed primarily at startups and SMBs. It has gradually revamped its model with the aim of serving as a one-stop finance shop for these companies before its pivot to focus on enterprise earlier this year.
A company spokesperson told TechCrunch that the company. The new enterprise-focused software offering is “getting some strong signs of empowerment. Since Empower’s April launch, monthly active users have grown 5x month-over-month “on an increasingly large base,” the spokesperson added. The company also said that the platform has surpassed $3 billion in annual processing volume in less than three months since it went live.
Meanwhile, a spokesperson told TechCrunch that Brax’s cash deposits are up 100% year-on-year, and rising interest rates have actually increased revenue in the deposit business. Brax declined to share firm revenue figures, saying only that “growth – even in this area – is very strong.”
The company took a big chance by betting on the enterprise space. It will be interesting to see how that bet plays out.
Reporter’s note: The story was amended after publication to clarify that. Swiecicki joins Rippling as CFO.
My weekly fintech newsletter, The Interchange, launched on May 1st! open up over here To find it in your inbox.