The firm had notched $100 million in funding in one year from notable investors, such as Coatue Management and Bessemer Venture Partners.
Kurt Rathmann, founder and CEO of the company, told the outlet, “It’s not the outcome we wanted, but it’s the fiscally responsible CEO thing to do.”
The company’s 100 staffers were informed in a town hall that 50 percent of them would be laid off immediately and there would be roughly 10 staffers who would help gradually close operations by August’s conclusion. Staffers who are leaving the firm will reportedly get 12 weeks of severance in addition to healthcare up to the close of the year.
ScaleFactor, which rolled out in 2014, provided software for the automation of back-office work, such as payroll and bookkeeping. The concept was to offer SMBs the kind of automated bookkeeping software that big firms have.
The firm offered its software for a flat charge to its clients. Its packages ranged from roughly $6,000 to $30,000 annually, but sales have reportedly faltered as SMBs reduce costs. In August of last year, the company had notched a Coatue-led $60 million Series C.
In a July 2018 story on data sharing, Rathmann told PYMNTS, “The U.S. has traditionally been a bit laggard in the evolution of banking and FinTech.” He noted that the market has, in the end, eventually caught up to the rest of the globe, and it will likely be no different in how the country handles data sharing and open banking.
“The world we live in today is more receptive to [data sharing] than it was even a year or two years ago,” he said.
In October, ScaleFactor had announced it was rolling out a commercial card meant to let SMBs manage spend and tailor their workflows for handling expenses. The solution was to let business owners give staffers cards and digital accounts, while bringing spend information into the company’s platform.