Taxfix leaped to a $1 billion valuation in 2022 on the back of a well-liked mobile app utilized by consumers help with tax returns. But fast forward to 2023, and the Berlin-based accounting startup is taking an audit of its own affairs. TechCrunch has learned and confirmed that Taxfix has laid off 20% of its staff — 120 employees — as a part of wider restructuring of the business aimed toward cutting costs.
The cuts were announced to staff on Tuesday. Pointedly, they’re coming within the wake of Taxfix acquiring a rival tax startup within the country, Stuttgart-based tax chatbot Steuerbot — a deal that was announced two months ago.
“With Taxfix’s recent successful acquisition of Steuerbot, great synergies are created, which enable us to heavily increase efficiencies. Due to this fact we took the strategic decision to restructure the organization,” a Taxfix spokesperson said in an emailed statement. Taxfix originally said it might operate Steuerbot as an independent and complementary subsidiary.
The sudden changes underscore the pressure that startups are under in the present market.
Probably the most promising of them could have raised big rounds in years past at top valuations to remain in so-called “growth mode” — intentionally remaining unprofitable and investing capital of their market and technology expansion.
But now, with the funding landscape dried up, most of the same startups are being expected to pursue quite a lot of other courses: conserve the money they’ve, cut costs where they’ll, be prepared to take hits on their valuations in the event that they do need to boost (especially in the event that they’re not tightening their belts), and aim for profitability — all boxes that Taxfix is now aiming to envision.
“The macroeconomic funding environment has modified over the past months, and it’s, subsequently, more essential than ever to position ourselves as an independent company for the long run. This entails a fair stronger focus of the business activities on sustainable growth and profitability,” the spokesperson said.
Taxfix didn’t comment on its current runway, nor whether it’s currently trying to boost more cash.
The last funding the startup raised was just over a 12 months ago, in April 2022, when it closed a $220 million Series D at a valuation of over $1 billion, from a formidable group of investors that included Teachers’ Enterprise Growth (formerly Ontario Teachers’ Pension Plan Board), Index Ventures, Valar Ventures, Creandum and Redalpine.
In additional heady times, you would possibly have expected Taxfix to follow the route of other high-flying unicorns: by now it might have scooped up yet more investors and capital at a fair higher valuation to interrupt into more markets and accounting categories. But as of late, seems like there’s so much riding on just keeping things operating steadily by itself steam.