Fetch Rewards Cuts Staff as Consumers Cut Back on Spending

As consumers cut back on spending due to macroeconomic challenges, Fetch Rewards, a Madison, Wisconsin-based startup that offers a centralized rewards points program for online and brick-and-mortar sellers, is making cuts of its own. The company reportedly laid off around 10% of its workforce, affecting around 100 employees.

“Fetch, unfortunately, had to make the difficult but necessary decision to let go of a set of employees to preserve the business’s overall health. The leadership at Fetch is working closely with these valued team members to help support them through this situation,” a Fetch spokesperson told The Information.

The company’s decision to lay off employees follows Apple’s privacy restrictions, which have resulted in rising digital marketing costs. Furthermore, according to a person close to the matter, rather than going after another round of funding, Fetch leadership set the goal of reaching profitability in 2023 with plans of getting acquired or going public.

According to a company spokesperson, despite the job cuts, profitability remains a goal for the company, and it has no plans of exiting. To date, Fetch has raised $240 million in equity and debt at a $2.4 billion pre-money valuation in March 2022 from backers such as SoftBank’s Vision Fund 2, Greycroft Partners, and Yuri Milner’s DST Global, according to PitchBook.

The company’s business model involves selling consumer data to companies that use Fetch Rewards to track consumer behavior and target customers with offers. The data is then collected through receipts scanned by Fetch customers from any retailer, and points are earned and can be redeemed for gift cards from companies such as Amazon, Walmart, Airbnb and Lululemon. According to CEO Wes Schroll, the solution aims to let customers earn rewards from multiple companies without having to sign up for the loyalty programs of each.

“I thought consumers would just get fed up with trying to maintain loyalty across 15 different systems,” Schroll said in a 2022 interview with The Wall Street Journal.

To date, Fetch has landed partnerships with big consumer-goods sellers like Walmart, who have turned more to advertising directly through retailers’ growing ad networks.

Walmart, for example, has seen its ad business in the U.S., Walmart Connect, grow 41% from the same period a year earlier, according to its most recent earnings report. According to the big box retailer’s recent earnings report, its ad business, Walmart Connect, in the U.S. alone grew 41% from the same period a year earlier. The retailer has also partnered with social media platforms, like TikTok and Snapchat, to engage with shoppers directly.

A similar startup to receive funding in the wake of Apple’s privacy changes is Upside, a cash-back app. Upside received venture capital funding and was noted to have last raised a $165 million Series D led by General Catalyst in March 2022, valuing the company at $1.5 billion. Upside helps customers find cash-back offers on purchases at gas stations, grocery stores, restaurants and convenience stores.

While the job cuts follow the recent collapse of Silicon Valley Bank last week, which sent many startups scrambling to secure funds to meet payroll, the Fetch Rewards company spokesperson clarified that it had nothing to do with its decision to make cuts. Over the weekend, federal bank regulators had taken steps to ensure that SVB customers could withdraw 100% of their deposits on Monday.