ShopBack, an online shopping rewards app backed by Temasek Holdings Pte, is cutting about a quarter of its workforce as it retreats from the buy-now-pay-later space.
The company is eliminating 195 roles, or 24% of its staff, to become more focused and self-sustainable, chief executive officer Henry Chan said in a note to employees on Tuesday (Mar 19,2024).
Chan further stated that ShopBack had started freezing salaries for leaders and paying out lower bonuses since 2022, but sustainable growth remained a challenge.
The Singapore-based startup told customers in an email that it would be discontinuing its buy-now-pay-later service in March, without offering reasons.
The buy-now-pay-later industry has struggled as households cut back on spending in the face of inflationary pressures, compared with the pandemic-induced frenzy that buoyed the rise of such companies.
Government regulators have also called for additional oversight of the industry to give consumers greater protections.
“I made the mistake of pursuing too many directions as a company and expanding our team too rapidly. I take full responsibility for the decisions that have led to this situation,” Chan said in the note to workers.
ShopBack, whose investors include SoftBank Ventures Asia and Rakuten Capital, offers cashback and other rewards for brands and retailers including Dyson, Lululemon and Foodpanda.
It bought fintech startup Hoolah in 2021 to add buy-now-pay-later services.
According to its website, founded in 2014 by Chan and Joel Leong, the platform has expanded to 11 markets across Southeast Asia, Australia, South Korea and Taiwan.
It raised US$200 million from investors including Westpac Banking Corp and Asia Partners in a Series F round in 2022. – Bloomberg
