The meteoric rise of restaurant ordering and payments platform Mr Yum has flamed out with the company announcing it will shed more than 40 jobs globally with CEO and cofounder Kim Teo admitting they “increased our headcount too quickly.”
Less than nine months after raising $89 million in Australia’s third-largest Series A, led by US VC giant Tiger global, Teo told the Mr Yum team that they decided to shed around 17% of current staff “to extend our runway while capital markets remain uncertain”.
All up, the software startup raised more than $100 million in just six months.
In May, Mr Yum acquired fellow Melbourne startup MyGuestlist and its subsidiary CRM platform Sprout for an undisclosed price, taking the global team to 260 people, meaning around 45 jobs will go in the cutbacks.
Teo shared “the heartbreaking news” more broadly on LinkedIn, saying the decision was “in line with a more focused strategy and structure to better support our customers, product vision and growth, while capital markets recover”.
“Our team are so close, it will feel like a part of us is missing,” she wrote.
“I’m so grateful for how our entire team have handled this today – with empathy, strength and camaraderie.”
She offered to share an opt-in list of the people made redundant with other startups looking to recruit.
In email to staff, Teo said they “completely accept and own” the rapid increase in headcount, and the decision to cut back was made “after deeply exploring every option available”.
“We made an assumption that the strong economic environment would continue deeper into 2022; instead, conditions deteriorated rapidly in May, back when we first communicated the situation with you, and capital markets have remained soft since,” she wrote.
“Every function will be impacted as we reduce roles that are no longer aligned with a more focused strategy towards our long term vision. We plan not to have to make headcount reductions again and to more forward with a more capital-efficient structure that supports our growth in all markets.”
The company is giving redundant staff an additional six weeks of severance pay on top of the standard notice and accelerated stock option vesting to the startup’s next milestone, and 3 months of mental health support.
“Please know this is in no way a reflection on your contributions to the company and our culture,” Teo wrote.
Earlier this month Mr Yum was among nine tech companies chosen for LaunchVic’s 30×30 program, which is focused on building startups with a “unicorn” – $1 billion – valuation by 2030.