InDebted raises $22.5 million and cuts 40 staff, CEO says no more ‘growth at all costs’

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InDebted founder and CEO Josh Foreman. Source: supplied.

It has been an eventful few months for InDebted — a fintech startup that helps people manage overdue payments — with significant staff layoffs and a multimillion-dollar capital raise capping off its end of financial year.

In May, it was named AFR‘s Best Place to Work in the tech sector thanks to a slew of policies like a four-day work week, and it also announced its expansion into the UK market.

The company’s latest funding round raised $22.5 million and doubled its valuation to $200 million, following a 2022 financial year that saw InDebted double its revenue.

This most recent round was led by Perennial Value Management, which is increasing its stake, and participation from Carthona Capital, MassMutual Ventures and some other minority shareholders, CEO Josh Foreman told SmartCompany.

On a not-so-positive note, InDebted restructured with a 17% staff cut — 40 people — just before the end of the financial year.

Foreman said only three Australian-based employees were impacted, with the majority of cuts felt in the US where InDebted’s sales and marketing teams are based.

“Despite recently closing a $22.5 million funding round, like many other high growth startups on the same journey as us, we’re not immune from having to respond to the shifting economic environment, which is likely to persist for the foreseeable future.”

The “difficult decision to say goodbye” was made as the company refocused its strategy “to prioritise efficiency and sustainability over rapid scale and ‘growth at all costs’.”

Foreman said the company’s values and culture have not changed since winning the Best Place to Work recognition, and pointed out that severance payments, access to transition support services, support from internal talent teams in finding new opportunities, and six months’ mental health and wellbeing support was provided to those affected.

In the US, healthcare benefits for impacted employees has been extended six months.

While the company has slowed its hiring “in response to the current environment”, it will continue to invest in growing headcount within its research and development functions.

This team, Foreman said, has grown 40% this year.

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