Booktopia and Wine Collective join other Australian startups in mass layoffs as inflation and interest rates bite
Tough market conditions have forced a wave of Australian start-ups to lay off staff, with a series of leading companies laying off employees to save money and delay the need to raise new funding.
The layoffs span industries, with companies as diverse as clinical trials platform HealthMatch, e-commerce aggregator Una Brands, instant grocery delivery startup Voly, online liquor retailer Wine Collective and the publicly traded online bookseller Booktopia.
Investor concerns over runaway inflation and rising interest rates have sent valuations of growth companies skyrocketing this year, with a sell-off in listed tech stocks bleeding into the start-up funding market. not listed. Companies that aren’t generating profits have been particularly hard hit, prompting venture capitalists to advise their portfolio companies to cut cash burn and accelerate profitability plans.
HealthMatch founder Manuri Gunawardena, whose company has become a darling of the healthcare startup scene, confirmed on Tuesday that he was forced to make layoffs within his team, cutting 18 positions.
“This meant approximately 50% redundancy for our team. I am heartbroken as we have built an incredible culture and team and will work with each of our team members to help them land on their feet,” said Gunawardena.
The 18 job losses represent 50% of the company’s workforce globally, but Gunawardena said the company had to make the difficult decision so it “can see through a pretty bleak horizon in the markets over the next 12 to 24 months and get out the other side”.
HealthMatch has received backing from high-profile investors including Malcolm and Lucy Turnbull and prominent venture capital firm Square Peg, and raised $18 million for its online clinical trial platform in 2020. The company was recently launched in the United States and will continue to operate overseas as it “meets its capital needs” with investors, Gunawardena said.
Eucalyptus, which runs a stable of youth-focused health brands including birth control pill delivery company Kin, has been accused of job cuts.
The widely followed industry social media page, The Aussie Corporate, posted a message claiming to be from a former employee saying the company was going through “huge structural change”.