Buy now, pay later Supplier Brighte bloated in size last year, but has now downsized. Still, the company said it’s “sustainable” because it doesn’t fund “impulse purchases.”
An Australian supplier who buys now, pays later, offers cash for home improvements and solar energy, has laid off 15% of its staff.
Still, the finance company called Brighte, which is backed by billionaire and Atlassian co-founder Mike Cannon-Brookes, is still looking to raise money for the company and is currently testing the market.
Brighte previously laid off 25% of its staff in March 2020 in anticipation of a market downturn as the pandemic hit.
A company spokesperson blamed changing market conditions for the recent layoff of 15% of its workforce.
“Brighte has gone through a period of rapid growth, more than doubling our workforce over the past year,” the spokesperson told news.com.au.
“However, market conditions have changed over the past few months with increased volatility and uncertainty affecting the broader tech sector.
“This has led us to seek to better position the business to respond to the market, carefully and proactively adjusting our cost base for long-term sustainable growth.”
The redundant roles were mainly based on business development and new products with 32 employees involved, they added.
Last year, the company more than doubled, from 84 employees in January to 181.
Brighte was founded by former Macquarie banker Katherine McConnell and has raised over $145m in funding since launching seven years ago, including $100m at the end of 2020.
Ms McConnell initially drew on her mortgage to offer to buy now, pay later financing for the solar panels and batteries when she started the business.
Brighte’s layoffs come as the secular sector of the BNPL has been battered with potential ‘carnage’ forecast for the sector as suppliers burn through cash, bad debts and cost of living pressures keep Australians away spontaneous purchases.
But Brighte’s spokesman said it was a “sustainable business”, which is “well capitalized and in a strong cash position”.
“Brighte customers use our BrightePay and Green Loan products to finance solar power, batteries and other home improvements to increase the sustainability of their homes and reduce their exposure to rising electricity prices. ‘energy. We don’t fund fashion, food and other fast-moving consumer goods,” they said.
“Brighte has a strong consumer portfolio of homeowners, with an average age of 45+ and with exceptionally strong credit ratings who are looking to make capital investments in their homes.
“Solar power is a conscious purchase – not an impulse purchase – and our customers enjoy a financial benefit in the form of savings of approximately $1,000 per year on average on their energy bills, making them also helps offset their refunds.”
The company continues to maintain extremely low levels of arrears and hardship and is monitoring them closely to better support customers, they added, and the energy crisis in Australia has created a “surge” in demand for solar financing and batteries for its suppliers.
According to the company’s website, it has approved over $1 billion in funding, which has retrofitted 100,000 Australian homes.
Another buy now, pay later provider with offices in Sydney has laid off 30% of its workforce, blaming market conditions for the huge downsizing in May.
Still, the company called BizPay was trying to raise $25 million in funding and partially completed it.
Its co-founder and chief executive, David Price, said the job cuts were a “strategic decision”.
“Due to the uncertainty in global markets, particularly the technology sector, and current market conditions, we have made the strategic decision to streamline operations and our workforce to support BizPay’s next phase of growth. “, he told news.com.au.
International operator Buy Now, Pay Later Klarna, which has received millions in investment from Commonwealth Bank, also laid off 10% of its staff and its valuation plummeted by $30 billion, according to the Wall Street Journal.
BNPL’s Australian suppliers have also been criticized by falling share prices. Overall, the sector lost A$1.05 billion in 2021, which has worried investors and seen share prices plunge this year.
But it is not only the sector of the BNPL which is mistreated.
A solar-focused start-up called 5B Solar, which has the backing of former Prime Minister Malcolm Turnbull, has also laid off 25% of its staff after completing a capital raise that would inject $30 million into the company. ‘company.
5B Solar co-founder and CEO Chris McGrath blamed ‘challenges’ hitting the company on ‘several different fronts’ for staff cuts, including supply chain and logistics disruptions caused by the pandemic, as well as soaring material costs to lay off dozens of employees.