Tech stocks and cryptocurrencies have often lost 50 percent or more of their price value since the beginning of the year. The same correction now seems to be reflected in the valuations of the start-ups. Recently, there have been reports that start-ups and fintechs are increasingly under pressure with regard to their valuations and funding. Klarna is such an example or the banking start-up Kontist. Nuri is now the Berlin crypto flagship start-up, which was able to shine with strong growth figures, especially in the previous year.
Last week, it was announced that Nuri will have to lay off around 20 percent or 45 employees – BTC-ECHO reported.
Nuri BOSS Kristina Walcker-Mayer openly deals with the stress of the last few days. She makes no secret of how exhausting it was to plan the change of strategy behind closed doors. She is visibly relieved about “now returning to 100 percent transparency”.
In the interview, the CEO provides deep insights into the situation Nuri – and the start-up scene in general – is currently in.
Nuri: Need a reassessment?
The job cuts suggest that Nuri needs fresh capital in a timely manner. If you look at the balance sheet figures, as the magazine Financial scene a few days ago, then doubts arise about the sufficient capital resources. After all, the brute growth – scaling, as it is so beautifully called – is also accompanied by a significant burn rate.
Kristina Walcker-Mayer would not like to comment on the current status of the funding process. However, she assures that they are in a permanent exchange with investors. Whether the crypto bank Nuri, which was valued at 144 million euros in the last financing round, has to accept a so-called flat or downround (valuation stagnates or even decreases), remains understandably unanswered. It would be conceivable in the current market environment.
Venture capitalists re-sort themselves
In the current difficult macro situation, the Nuri Managing Director above all wants more clarity. Walcker-Mayer tells BTC-ECHO: “What you can definitely notice is that the parameters have changed, which makes an attractive start-up in our stage. In general, this development in the VC market in Germany has not yet been discussed in detail.” The discussion in the US media has already progressed further.
For this reason, at Nuri, you would have also tried to Letter to classify what it means for the financing of start-ups, among other things, if the capital becomes more expensive or the key interest rates rise significantly and a war in Ukraine unsettles the investors.
The sometimes exaggerated assessments of recent years now meet a new reality. ”There was already talk last year that the prices paid for some start-ups could actually no longer be justified by the revenue projection of the next few years,” explains Kristina Walcker-Mayer in an interview with BTC-ECHO. However, the same demand has put an abrupt brake, as she continues: “There is a concern, especially in the US, that we will enter a recession, like the dot-com bubble. But even if VCs in Germany are a little more optimistic, the uncertainty is enormous. They stay away from larger rounds and prefer to secure their existing portfolios of start-ups.” As a result, the Nuri Managing Director believes it is likely that some start-ups will have to go flat or downround in the next 24 months.
More than courses: infrastructure remains
Due to the massive price corrections in cryptocurrencies, it is obvious that crypto start-ups are currently under particularly strong pressure. However, it is important to point out to Kristina Walcker-Mayer that you don’t want to put an entire industry on the same page. She says: “There are many companies that are building the infrastructure of tomorrow, including blockchain finance and Web 3.0. The value that is created here must therefore be considered separately from the development of crypto prices.”
Nuri: This is how the job cuts were carried out
When asked about the impact of the job cuts on the company, the Nuri BOSS explains that individual topics that had been forced in the course of the strong scaling are now being parked in parts. “We looked at which topics really matter in the next six months and where you can most likely let go of. Since we don’t know how long the difficult macro environment will last, we first take everything off the table that we don’t need today in order to become profitable quickly.”
In order not to neglect the further development of the company, one relies above all on a reorganization of projects. “What we have not done is to cut 20 percent of the jobs from each department at a flat rate. Instead, we developed a plan or a new strategy and put the teams together again.” The Nuri Managing Director cites quality management as an example of this. So far, this has been ensured by a separate team. Now this function is being integrated into each individual department, and therefore more personal responsibility in quality assurance is being demanded of employees.
Outlook for 2022
It is no secret that the year 2022 so far is not easy for the crypto industry. Nuri is also confronted with lower investment volumes from retail customers, as Walcker-Mayer admits. “However, this decline is not as strong for us as we see it on some other platforms, where active trading is particularly incentivized,” emphasizes the CEO. After all, the product range is based on long-term and regular investing, which is less affected by the market situation. You also benefit from the fact that more and more customers are using the classic bank account, detached from the crypto services.
“If we had already entered crypto at that time, i.e. in 2019, before the alltimehigs …” is a sentence that the Nuri Managing Director has often heard from VC investors and retail customers in recent times. The comparatively low prices should therefore encourage more and more crypto-interested people to buy or enter the crypto sector. Kristina Walcker-Mayer is sure of that.
In any case, customers of Nuri do not need to worry. The crypto bank is subject to the highest regulatory standards. The deposits are 100 percent secured by law at all times, Walcker-Mayer assures.
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