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Stash, last valued at $1.4B, lays off 25% of staff

Mar 13, 2024
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Illustration: Tiffany Herring/Axios

Last valued at $1.4 billion, subscription investing app Stash is laying off about 25% of its workforce, Axios has learned.

Why it matters: Fintech companies continue struggling to adjust in the post-pandemic era.

Details: The layoffs affect about 80 people, bringing its total headcount to around 220. At its peak, Stash had a roughly 500-strong workforce. CEO Liza Landsman announced the layoffs in a note to employees this morning.

  • "Though we've seen promising green shoots across many aspects of our platform, that growth hasn't materialized as quickly as we'd planned," Landsman wrote.
  • By cutting costs, she told Axios in an interview, the company will be able to hit cash-flow break-even in the final quarter of 2024, rather than in 2025.
  • It will also remove pressure to launch new products while waiting for its current bets to come to fruition.

What's next: Stash has refocused on its core customer base — long-term investors — and stepped back from short-term traders that flooded in during the pandemic.

  • The cost of servicing less-engaged short-term accounts exceeded the revenue they brought in, so the company has been migrating them off the platform. The company now has about 1.5 million active subscribers, down from 2 million last year.
  • Last year, Stash unveiled a customer onboarding experience aimed at bolstering trader engagement, and it plans to launch an employee benefits offering this year.

Stash raised a $40 million convertible note led by T. Rowe Price, announced in October.

  • The cuts will extend its cash runway.

Flashback: Valued at $1.4 billion in 2021 by investors including T. Rowe Price and Eldridge, Stash has had multiple rounds of layoffs over the past few years and has changed its executive team.

  • Axios previously reported that the company had laid off about 120 people over the course of a year by May 2023 and had gradually added positions.
  • Landsman joined as CEO in February 2023, CTO Chien-Liang Chou joined in August, and in October, Amy Butte was named independent audit chair.

Between the lines: Stash gets roughly 80% of its revenue from subscriptions, which tamps down on volatility. But Stash has also not benefited from rising interest rates to the same degree as its peers.

  • Stock-trading startup Robinhood in the fourth quarter derived most of its revenue from net interest rather than trading.

By the numbers: The company earned $104 million last year, with $3.4 billion in assets under management.

  • Landsman previously told TechCrunch that it ended 2022 with revenue a little below $125 million, though it had been increasing gross profit margins.
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