Just a year after raising the largest equity funding round in New Brunswick history, Fredericton- and Miami-based Introhive is laying off about 16 percent of its workforce as the company braces for economic headwinds.
Chief Executive Jody Glidden said in an interview that after the layoffs, Introhive will have about 300 employees. He didn't reveal how many people the company now employs in Atlantic Canada, but the hardest hit region by the staffing cuts is iin India.
Last June, Introhive made history by raising a US$100 million (C$122 million at the time) Series C funding round led by Boston-based PSG, which specializes in backing middle-market software companies. Now, with a slowing global economy and eye-watering interest rate hikes by central bankers, Glidden foresees a temporary slowing of Introhive’s growth.
“We’re expecting slower growth,” he said. “We’re still expecting to grow but think it will be a little bit slower.”
Introhive sells AI-based customer relationship management, or CRM, software. It uses artificial intelligence to identify data stored in companies’ tech systems, and help them to use it to increase revenue and improve productivity. The co-founders, Glidden and Stewart Walchli, are serial entrepreneurs who previously sold two companies to Blackberry, then called Research in Motion.
But in the United States, the world’s largest economy, stocks just posted their worst first half in more than 50 years, and more than 70 percent of consumers say they believe a recession is coming. In Canada, inflation is at its highest level since the frenzied price hikes of the 1980s, while the Bank of Canada last week raised interest rates by a full percentage point — the biggest jump in nearly 25 years.
Glidden said he expects investors to “show a preference for companies that focus on profitability,” compared to privileging fast growth above all, as is de rigueur among startups.
Asked if Introhive is now working on becoming profitable, he said the company’s focus is on “getting closer to it.” And in a statement posted to his social media accounts, he wrote that right-sizing the company is a step in that direction.
Last year, Introhive surpassed $20 million in revenue and Glidden had previously said he hoped to reach $100 million by the end of 2023.
“We’re focusing on more conservative growth until the recession, and then once the recession is over we’ll be pushing the pedal down again,” he said of the new strategy.
Glidden stressed that Introhive is helping its laid off employees find new opportunities, including by collaborating with shareholders to find job openings in their other portfolio companies, and he asked that businesses in need of staff contact his team. That contact is Careermatch@introhive.com.
Introhive closed its offices in Canada and the United Kingdom Wednesday in what he described as a display of respect for its laid-off staff.