Buy now, pay later provider Brighte has grown massively last year, but has now cut its workforce. Still, the company said it’s “sustainable” because it doesn’t fund “impulse buying.”
An Australian buy now pay later provider offering money for home improvements and solar has laid off 15 percent of its workforce.
But the financial firm Brighte, which is backed by Atlassian billionaire and co-founder Mike Cannon-Brookes, is still looking to fund the company and is currently exploring the market.
Brighte had previously laid off 25 percent of its staff in March 2020 in anticipation of a market slowdown due to the pandemic.
A company spokesman blamed changing market conditions for the recent layoff of 15 percent of its staff.
“Brighte has gone through a period of rapid growth, more than doubling our workforce in the past year,” the spokesperson told news.com.au.
“However, market conditions have changed in recent months, with increased volatility and uncertainty impacting the broader technology sector.
“As a result, we have sought to better position the company to meet the market, by cautiously and proactively adjusting our cost base for long-term sustainable growth.”
The redundant roles were primarily based on business and new product development, with 32 employees affected, she 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 more than $145 million in funding since its launch seven years ago, including $100 million by the end of 2020.
Ms. McConnell originally took out her mortgage to buy now, pay off financing for solar panels and batteries later when she started the business.
The Brighte layoffs come as BNPL’s lay sector is battered with a potential “bloodbath” predicted for the sector as lack of funds, a balloon of bad debt and pressure on the cost of living drive Australians away from spontaneous purchases.
But Brighte’s spokesperson said it is a “sustainable company”, which is “well capitalized and has a strong cash position”.
“Brighte customers use our BrightePay and Green Loan products to fund solar, battery and other home improvements aimed at making their homes more sustainable and reducing their exposure to rising energy prices. 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 plus and exceptionally strong credit scores looking to make capital investments in their homes.
“Solar is an informed purchase – not an impulse buy – and our customers experience a financial benefit in the form of savings on average about $1,000 a year on their energy bills, which also helps them offset their repayments.”
The company still maintains extremely low payment arrears and hardships and is closely monitoring them to better support customers, she added, and the energy crisis in Australia had led to a “rise” in demand for solar and battery financing for its suppliers.
According to the company’s website, it has approved more than $500 million in financing for 60,000 Australian households.
Another ‘buy now, pay later’ provider with offices in Sydney made 30 per cent of its staff redundant and blamed market conditions for the massive cut in headcount in May.
Still, the company called BizPay was in the process of raising $25 million in funding and has partially completed it.
Co-founder and CEO David Price said the job cuts were a “strategic decision”.
“Due to the uncertainty in global markets, especially the technical sector, and the current market conditions, we have made the strategic decision to streamline operations and our workforce to support BizPay’s next growth phase,” he told news.com. ouch.
International buy now, pay later operator Klarna, which has received millions in investment from Commonwealth Bank, also laid off 10 percent of its workforce and its valuation fell by $30 billion.
Australian BNPL providers have also suffered from falling stock prices. Overall, the sector lost a staggering $1.05 billion in 2021, which has alarmed investors and has seen stock prices plummet this year.
But it’s not just the BNPL sector that has been hit hard.
A startup focused on the solar energy sector called 5B Solar, which boasts the backing of former Prime Minister Malcolm Turnbull, also laid off 25 percent of its staff after completing a capital increase that would inject $30 million into the company.
5B Solar co-founder and chief executive officer Chris McGrath blamed “challenges” affecting the company on “multiple different fronts” for its workforce reductions, including supply chain and logistics disruptions caused by the pandemic, as well as the rising costs of materials to let dozens of employees go.