Investment in Israeli startups dwindled to 319 deals worth a total of $5.4 billion in the first three quarters of 2023 (Shutterstock)
Fintech company Melio in Israel announced the layoff of 40 employees, constituting 7% of its workforce.
According to Globes, this layoff is the company's second round of layoffs since 2022, when 10% of its 600-employee workforce faced dismissal.
Melio provided clarification about the layoffs, saying that her office in Israel alone expanded from about 90 employees to more than 400 employees in the past three years, without considering the sustainability of the company’s previous growth model.
CEO Matan Bar acknowledged the difficulties faced by employees, saying "this is a difficult day for all of us" but defended the decision, stressing the need for responsible management in the face of regulatory challenges.
Barr insisted that Milio remains committed to its 2024 targets and expects accelerated growth despite the current setbacks.
Melio, which is valued at about $4 billion, faces doubts about its future path.
Despite the company's partnerships with major financial institutions such as JP Morgan and Capital One, in addition to cooperation with the e-commerce giant Shopify, it did not protect it from the negative publicity surrounding the ongoing layoffs since the Corona epidemic.
Investment in Israeli startups diminished to 319 deals with a total value of $5.4 billion in the first three quarters of 2023, compared to 694 deals worth $15.7 billion in the same period of 2022, with expectations of a further decline during the rest of the year against the backdrop of the repercussions of the “Al-Aqsa Flood” and the war. On Gaza.
The number of startup companies whose value exceeded one billion dollars (unicorns) in 2023 declined to only three, compared to 18 companies in 2022 and 35 companies in 2021.
In general, venture capital fundraising in Israel declined by 69% in the first three quarters of 2023 on an annual basis, with 10 new funds raising $1.4 billion compared to 51 funds that raised $4.5 billion in 2022.
Source: Israeli press