Fi Money shuts down some features, trims workforce to stay afloat-OxBig News Network

The company is facing severe runway issues and struggling to secure capital from existing and new investors due to poor financial performance, said two of the three people, adding workforce reductions are among the many steps the startup has taken to cut costs.

“While the company has been in the market to raise capital for some time now, some existing investors have written off their investment in Fi Money,” said the third person, on the condition of anonymity.

To be sure, the company hasn’t filed its 2023-24 financials, and it could still be a while before it does so, said the three people.

Fi Money, on the other hand, said it had shared audited financials with relevant stakeholders, but hadn’t made them public yet.

In 2023, the Bengaluru-based fintech laid off around 10% of its staff in an effort to extend its cash runway to two years amid a worsening funding winter, according to a Moneycontrol report. It had around 300 people on its payroll at the time.

Founded in 2019 by Sujith Narayanan and Sumit Gwalani, it has raised close to $150 million from investors, including Alpha Wave Global, Temasek, Quiet Capital, QCM, B Capital, Ribbit Capital, and Peak XV Partners, over the last six years.

It was last valued at $524 million in July 2022 during its $71 million Series C round, showed data from market intelligence firm Tracxn Technologies.

Epifi Technologies Pvt. Ltd, Fi’s parent, reported ₹38 crore in revenue from operations in 2022-23, up from ₹17.5 crore a year ago. Its expenses zoomed to ₹365.7 crore from ₹272 crore in 2021-22. The loss stood at ₹301.8 crore as compared to ₹249.8 crore a year ago, Tracxn data showed.

“Strategic choices”

A Fi Money spokesperson confirmed that the startup had been making “strategic choices to strengthen its foundation and the future” for the past few quarters. “We’ve streamlined operations, prioritized key products, ensuring every initiative is aligned with long-term user value and business sustainability,” the spokesperson said.

“We’ve phased out a few features that didn’t meet our benchmarks for engagement or monetization. These decisions were rooted in data and user insights, reflecting our sharper focus on building a more sustainable and relevant product experience,” the spokesperson added.

Fi Money claimed that it was adequately capitalized and operationally agile to deliver innovation across banking, lending, and wealth management. “Like any ambitious startup, we make multiple bets, some of which work better than others, but we’ve always operated with a learning mindset.”

Earlier this week, it launched a new feature that allows users to securely connect their financial data to AI assistants such as ChatGPT, Gemini, and Claude.

The neobank offers its products to over 3.5 million users across 19,000 pin codes in India. Some of its offerings include a zero-forex international debit card, AI-powered money insights, goal-based saving tools, mutual funds, US stock investments, instant loans, credit cards, and more.

It competes with other neobanks such as Jupiter and Niyo.

Industry-wide churn

Mint reported on 11 March that Jupiter (Amica Financial Technologies Pvt. Ltd), which is in early-stage discussions to raise $30-50 million from existing investors, has also seen several top-level exits during its cost-cutting and restructuring exercise to reduce customer acquisition costs.

Niyo (Finnew Solutions Pvt. Ltd) has also witnessed a significant churn. Its chief strategy officer stepped down in April even as the digital-only bank navigates a slowdown in revenue, delays plan for an initial public offering, and a rise in pressure to deliver profitability, Mint reported on 9 April.

Neobanks offer banking services in partnership with traditional banks.