Tax fix jumped to a $1 billion 2022 valuation on the back of a popular mobile app used by consumers to help with tax returns. But fast forward to 2023, and the Berlin-based accounting startup is conducting an audit of its own affairs. TechCrunch has learned and confirmed that Taxfix has laid off 20% of its workforce – 120 employees – as part of a broader restructuring of the company to cut costs.
The cuts were announced to staff on Tuesday. Clearly, they come in the wake of Taxfix acquiring a rival tax startup in the country, Stuttgart-based tax chatbot Steuerbot – a deal that was announced two months ago.
“With the recent successful acquisition of Steuerbot by Taxfix, major synergies are emerging, allowing us to greatly increase efficiency. Therefore, we have made the strategic decision to restructure the organization,” a Taxfix spokesperson said in an emailed statement. Taxfix originally said it would operate Steuerbot as an independent and complementary subsidiary.
The sudden changes underline the pressure that startups are under in today’s market.
The most promising of them will have made big rounds at top valuations in recent years to stay in so-called “growth mode” – deliberately remaining unprofitable and investing capital in their market and technology expansion.
But now that the funding landscape has dried up, many of the same startups are expected to take a variety of other courses: save the money they have, cut back where they can, be prepared to go against their valuations if they need to raise (especially if they don’t tighten their belts), and strive for profitability – all boxes that Taxfix is now trying to check.
“The macroeconomic financing environment has changed in recent months and it is therefore more important than ever to position ourselves as an independent company for the long term. This means an even stronger focus of the business activities on sustainable growth and profitability,” said the spokesperson.
Taxfix has not commented on the current runway, nor whether it is currently trying to raise more money.
The last funding the startup raised was just over a year ago, in April 2022, when it closed a $220 million Series D with a valuation of more than $1 billion from an impressive group of investors, including Teachers’ Venture. Growth (formerly Ontario Teachers’ Pension Fund Board), Index Ventures, Valar Ventures, Creandum and Redalpine.
In more heady times, you might have expected Taxfix to follow the route of other high-flying unicorns: by then, it would have brought in even more investors and capital at even higher valuations to break into more markets and accounting categories. But these days it sounds like there’s a lot going on to make things work steadily on their own.