Trulioo to cut up to 10 percent of staff, exit small business market

Vancouver-based unicorn plans to focus on medium and large enterprises.

Global online identity verification firm Trulioo plans to lay off five to 10 percent of its staff as part of its decision to stop selling to small businesses.

Trulioo confirmed to BetaKit that has laid off 24 people this month in Canada, and expects its staff cuts to reach 40 to 50 globally. As first reported by The Globe and Mail, this represents five to 10 percent of the Vancouver-based unicorn’s team. Prior to these layoffs, Trulioo had about 400 employees.

“We approached this as a one-time repositioning of the company.”
-Steve Munford, Trulioo

According to Trulioo, these layoffs come as a result of its decision to stop selling to small businesses, which comprised a small component of the company’s revenue but was particularly resource-intensive from a go-to-market standpoint. Trulioo plans to focus more of its efforts on its “fastest-growing segment”: medium and large enterprises operating in multiple countries.

“This is a business decision based on the fact that we’ve decided to stop selling to the small business segment to concentrate our efforts on medium and large customer segments,” Trulioo CEO Steve Munford told BetaKit. “The small business segment of our business has typically accounted for less than 3% of our revenue, but accounts for an estimated 50% of our go to market resources.”

Trulioo will continue to serve its existing small business customers. Munford added that staff in other areas of the company were not impacted by the move, noting that Trulioo does not anticipate having to make any additional layoffs in the near-term. “We approached this as a one-time repositioning of the company,” he said. “We are confident that this increased focus will allow Trulioo to operate for growth in changing business climates.”

Trulioo closed $476 million CAD in Series D funding last year led by Silicon Valley venture firm TCV, giving the company a $2 billion valuation.

RELATED: Trulioo hits $2 billion CAD valuation following $476 million Series D led by TCV

Founded in 2011, Trulioo claims to provide “the most robust and comprehensive global identity verification solution in the market.” Through a single API, Trulioo helps customers satisfy regulatory requirements through its identity marketplace, which the startup says draws from over 400 trusted data sources to verify the identities of over five billion people from across the world.

The company’s customers include payment processors, online trading platforms, digital marketplaces, crypto exchanges, and other types of financial services companies, ranging from global banks to Fortune 500 enterprises and tech giants.

In recent months, rising inflation, interest rates, and geopolitical tensions have contributed to a broader market downturn that has led many high-growth tech firms to reduce costs and lay off staff amid a difficult fundraising environment and prospective recession.

According to layoff tracking website Layoffs.fyi, 639 tech companies from across the world have cut a combined 81,533 employees so far this year. Other Canadian tech companies that have laid off staff recently include Ada, SkipTheDishes, Q4 Inc, Vendasta, AlayaCare, Hootsuite, Dooly, Article, Mejuri, Uberflip, RenoRun, Shopify, Wealthsimple, Clearco, Unbounce, Clutch, Coinsquare, Introhive, Ritual, and Bonsai.

RELATED: AI startup Ada cuts 16 percent of its workforce

But according to Munford, Trulioo’s decision to stop selling to small businesses was not informed by worsening economic conditions. “[Trulioo] would have made the same decision during any economic climate,” he said.

When asked whether Trulioo was taking any steps to preserve cash in this environment during a June interview with BetaKit at Collision, Munford said, “We’re not doing any layoffs, we plan to slow hiring in the second half of the year, and we ‘re probably slowing it more than we otherwise would have, so yeah, we are adjusting and being cautious.”

Speaking with BetaKit in June, the CEO noted that Trulioo had no plans at the time to scale back its growth strategy amid present market conditions, claiming that they make for “a much more reasonable environment” to potentially make acquisitions and noting that the company still has “a lot of dry powder” to fund organic and inorganic growth.

Munford told BetaKit in June that while Trulioo was “very profitable the last two years,” the company is working towards being just cash-flow neutral this year as it invests in its platform and explores acquisition opportunities like Denmark-based HelloFlow, which Trulioo bought earlier this year for an undisclosed sum.

RELATED: Canadian tech companies continue to hire despite downturn — here’s an (incomplete) list

This comes as, according to The Globe, Trulioo is forecasting slower revenue growth this year than the 100 percent the company saw in 2021. But Munford told BetaKit the company remains well-capitalized and positioned.

“We have strong operating fundamentals, a strong balance sheet and supportive investors,” said Munford, adding that he believes the company’s decision to stop selling to small businesses “will propel the company forward with increased focus.”

“We believe now is the time to double-down on the customer segment where we provide the most value,” said the CEO.

Feature image courtesy Trulioo.

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