Business
Temasek-backed ShopBack cuts workforce by 24% amid exit from BNPL sector
Temasek-backed ShopBack cuts 24% of its workforce, or 195 jobs, as it exits the BNPL sector. The Singapore-based company aims for focus and sustainability, per CEO Henry Chan. Temasek through its subsidiaries has reportedly invested US112.5 million into the company.
ShopBack, a Singapore-based online shopping rewards platform supported by Temasek, Singapore’s sovereign wealth fund, has announced a significant reduction of its workforce by about a quarter.
This move, reported by Bloomberg, involving the elimination of 195 positions or 24% of its staff, aligns with the company’s strategy to withdraw from the buy-now-pay-later (BNPL) sector.
The announcement was made by Chief Executive Officer Henry Chan in a note to employees, highlighting the company’s efforts to focus on its core operations and achieve sustainability.
The company, which is backed by investors including Temasek, SoftBank Ventures Asia, and Rakuten Capital, has been implementing cost-saving measures since 2022.
These measures include freezing salaries for leadership positions and reducing bonus payouts, as stated by Chan. Despite these efforts, sustainable growth has proved challenging.
Customers were informed via email that ShopBack’s BNPL service would be discontinued in March, although the reasons for this decision were not detailed in the communication.
The BNPL industry has faced difficulties recently, with a downturn in consumer spending amid inflationary pressures and calls for more stringent regulatory oversight to protect consumers.
Chan admitted to strategic errors in expanding the company’s direction and workforce too rapidly, taking full responsibility for the decisions leading to the current situation.
ShopBack, founded in 2014 by Henry Chan and Joel Leong, operates across seven countries in Southeast Asia, in addition to Australia, Taiwan, and Korea.
The platform partners with over 5,000 merchants, offering cashback and rewards for purchases from various brands and retailers.
The acquisition of fintech startup Hoolah in 2021 marked ShopBack’s entry into the BNPL market, a venture the company is now retracting from.
The company has attracted significant investment over the years, raising US$75 million in a funding round in 2020 from Temasek, Rakuten, and EV Growth. Temasek reportedly contributed US$32.5 million, reportedly done through an indirectly owned vehicle called Dahlia Investments.
The company secured an additional $200 million in a Series F round in 2022 from investors, including Westpac Banking Corp. and Asia Partners. Temask’s 65 Equity Partners contributed US$80 million.
This article was first published on Gutzy Asia.
