Figure Technologies has undertaken staff layoffs and is currently gearing up for an initial public offering (IPO). The company terminated 90 employees, which accounts for 20% of its workforce, based on documents reviewed by the media outlet.
As per Bloomberg's report, Figure Technologies initiated interviews with bankers in preparation for an IPO for its lending business scheduled for the upcoming year. The documents revealed this additional information about the company's plans.
Figure executives engaged in discussions with bankers regarding the possibility of making their lending division public. This decision came after the division achieved remarkable performance, with a record $900 million in volume during the second quarter. Additionally, the business demonstrated profitability and boasted a contribution margin exceeding 50%.
Co-founder Mike Cagney expressed his anticipation that LendCo's valuation would reach $2.5 billion upon its public listing.
Earlier this year, the company faced challenges in raising funds due to the broader economic downturn that affected numerous firms in the technology and cryptocurrency-related sectors, as mentioned in the report.
In February, reports indicated that Figure Technologies had to revise its funding goal due to the impact of the venture capital downturn. The company decided to cut its initial target by two-thirds and aimed to raise $100 million instead of the previously planned larger sum.
Additionally, Figure was contemplating spinning off certain product lines to navigate the challenging funding landscape. Despite the challenges, the company appeared to be nearing the $100 million fundraising milestone.
During that period, Figure Technologies was contemplating a restructuring that involved a spinoff of its markets and payments businesses from its lending division, though no layoffs were planned at the time. The company had expanded its operations to include core banking services, as Co-founder Mike Cagney mentioned in an interview with PYMNTS.
Some of these services included Figure Pay, a Banking-as-a-Service (BaaS) solution featuring a Visa debit card, as well as integrated buy now, pay later (BNPL) and payday advance functionalities. Figure offered these services through a platform designed specifically for FinTechs, nonbank entities, and retailers, leveraging its embedded issuer processing services.