Over the past three years, I’ve been reporting on how the startup scene in Austin is booming. Record funding in 2019. New unicorns being born. More outside investors putting money into the market.
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But no city, no matter how much momentum it’s seen, is immune to the negative economic impact from the spread of COVID-19. Austin in particular already took a big hit when South By Southwest (SXSW) organizers had to cancel the massive annual event just weeks ago.
This week so far, Austin Inno’s (very talented and just an overall good guy) Brent Winstrom reported on three companies – all of which have raised venture capital funding over the past eight months – who have had to lay off staff.
For starters, Austin-based marketing software startup OutboundEngine said this week it would be letting go of 52 employees, according to Austin Inno. The company’s leadership team will also be seeing a 30 percent reduction in compensation, CEO Marc Pickren told Austin Inno. OutboundEngine has about 135 employees after the layoffs.
Pickren told Austin Inno: “The layoffs are a direct response to COVID-19 and its sea change impact to the financial markets.”
Last August, the company had raised $14.3 million in venture and debt financing, which we reported on here. The venture capital was raised from S3 Ventures, Silverton Partners, Noro Mosely, Alerion Partners, and Harmony Partners. Founded in 2012, OutboundEngine has raised a total of $48.1 million over its lifetime, according to Crunchbase data. The company’s marketing software provides “a responsive website, relevant content created and sent automatically across email and social media, and hands-free social advertising on Facebook and Instagram.” In 2018, the startup had a $23 million annual run rate, according to Pickren.
Layoffs abound
The Guild, an Austin-based hospitality startup aiming to bridge the gap between Airbnb and hotels, has laid off 38 people, according to an article in The Information cited by Austin Inno. In January, we reported on the fact that The Guild had closed on a $25 million Series B from Maveron, Convivialite Ventures, MarkVC, and ATX Venture Partners, among others. At that time, the company had about 170 employees. That financing brought The Guild’s total known venture funding to $31.5 million. (Earlier this week, we reported on a number of other high-profile layoffs in the travel and hospitality industries here).
Lastly, Yonder, which uses artificial intelligence to help companies identify disinformation campaigns, has let go of 18 of its employees. The startup announced a $3 million Series A from Lux Capital and BuildGroup last July, and has raised about $16 million since it was founded in 2015, according to Crunchbase data.
Meanwhile, a source told me confidentially that she was laid off this week from Irvine, Calif.-based Restaurant365’s Austin office. According to that source, the company laid off 95 percent of its sales staff “and many others” in the Texas capital via “a pre-recorded message from HR.”
I’ve reached out to the company for comment.
Unrelated to the coronavirus, Austin-based fintech startup ScaleFactor said last month it would be cutting dozens of jobs as part of a reorganization. That move came just a few months after the company raised a $60 million Series C, which we reported on here.
Illustration: Li-Anne Dias
New York-based biotech company raises $2.5 million to fund AI platform to help speed up the timeline for finding a way to treat COVID-19.
Online marketplace OfferUp has raised $120 million in new funding and acquired shopping app Letgo, the company announced Wednesday.
The profitable San Antonio-based company has received hundreds of orders for its $125,000 robot over the past few weeks.
Dell Technologies and Accel invested in Humio, which says it saw 550% revenue growth in 2019.
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COVID-19 Concerns Already Leading To Startup Layoffs In Austin - Crunchbase News
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