BC unicorn Trulioo cuts jobs as company exits small business market

Steve Munford, CEO of Trulioo, poses for a photo at the company’s offices in downtown Vancouver, British Columbia on February 7, 2022.Jesse Winter/The Globe and Mail

Another Canadian unicorn company, Trulioo Information Services Inc. , is laying off employees, although the Vancouver company says the cuts are not part of a broader effort to tighten the belt to prepare for worsening economic conditions, as has been the case across the sector.

Trulioo CEO Steve Munford said in an interview that the provider of online identity verification services for digital businesses has laid off 24 people this month in Canada, and expects the cuts to total 40 to 50 globally, with between 5 and 10 per cent. cent of the workers.

The cuts stem from the company’s decision to stop selling to small businesses, a segment of the market that represented just 3 percent of the company’s annual revenue of more than $100 million but used half of the company’s “entering market” resources, which are marketing and sales staff.

Munford said the cuts focused exclusively on this area, and no one was affected in engineering, product development, product management, and any general, management and legal partnerships. “It was really an economic business decision driven by this sector. We were losing money” selling it to small businesses. “We focus on where 97 percent of our revenue is and what drives our growth” in the larger enterprise segment of the market.

Trulioo has the ability to digitally confirm the identities of most people on the planet and hundreds of millions of businesses. With more than 400 employees, Trulioo’s clients include payment processors, online marketplaces, cryptocurrency exchanges, and financial services giants.

It was one of several Canadian tech companies that decided this year to scale back hiring plans as a precaution as high inflation, rising interest rates and other geopolitical and economic challenges affect economies globally. However, while many other money-losing tech companies have since announced deep cuts to their ranks to conserve cash, Trulioo does not expect to do so, as it has typically operated at or above break-even on an operating basis – which is a rarity. relatively. Among the developing companies in their early stages.

“If we had had any inclination, we would need to make further cuts in the near future, we would have done it right away,” Mr. Munford said. “But we don’t.”

Although Trulioo expects slower revenue growth in 2022 than the 100 percent increase it saw last year, “our business fundamentals are strong,” said Mr. Munford.

He added that the company still had a “strong cash balance” after it raised $394 million last year in a deal led by Silicon Valley TCV that valued Trulioo at $1.75 billion after financing (startups over $1 billion are known as “unicorns”). “). Other investors include Bloomberg Capital, Morrow Capital, venture capital arms of Citigroup, American Express, Goldman Sachs Group, Banco Santander and Fremont Venture Partners.

“If you look at past economic cycles, companies with strong balance sheets that are still on the right track ultimately own their markets. They are not the ones who have had bad economics before or have been constantly raising money or have high cash burn rates and they cannot afford these cycles. These are the ones facing the challenges, and that’s not us.”

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