London’s biggest tech firm, Checkout.com has seen its internal value plunge to $11 billion (£9 billion) as dwindling consumer sentiment weighs on the fortunes of the fintech sector.
The company told employees it had slashed its internal valuation to “reflect current macroeconomic conditions”, according to reports in the Financial Times. The Shoreditch-based business had been valued at as much as $40 billion in January following a $1 billion investor funding round.
Employees were told the price at which they could exercise equity awards would be reduced from $252 to $65 per share.
A Checkout.com spokesman declined to comment on the reports.
In September, Checkout.com said it was slashing around 100 employees, amounting to 5% of its workforce. In a statement the firm said: “This decision did not come lightly, but will allow us to focus on the strategic priorities against our mission.”
It comes after Swedish fintech Klarna saw its valuation plunge 85% from $45.6 billion earlier this year to just $6.7 billion as investors weighed the prospects for the firm after higher interest rates squeezed its profits. The firm has also made a series of layoffs in a bid to cut costs.
Klarna co-founder Sebastian Siemiatkowski said in a Tweet in July: “As investor sentiment shifts it is time to return to profitability. What doesn’t kill you makes you stronger.”
Another London fintech, Zilch was in November poised to begin a wave of layoffs as the buy now pay later business wrestles with the impact of recession and rising interest rates.
A company spokesperson said: “In the last year the world has changed, and any business that thinks it’s immune to this historic economic change is mistaken. With millions of customers depending on us, we must continue to drive towards bottom-line profitability.”
There have been close to 140,000 layoffs at tech companies since the start of 2022, according to redundancies tracker site Layoffs.fyi.
