One of Atlanta’s latest unicorn companies is laying off around 12% of its staff just over a month after raising $24 million as technology companies nationwide continue to grapple with an investor pullback.
Digital experience startup FullStory Inc. made the layoffs to “align to the current macro environment and focus on long-term sustainable growth,” said a spokesperson in an email. Positions that were impacted were primarily in sales and recruiting functions. Atlanta Inno reported in August 2021 that the startup has approximately 300 employees.
“Last year, we really hit the accelerator to keep up with growing market demand,” said FullStory founder and CEO Scott Voigt in a LinkedIn post. “Unfortunately, economic headwinds shifted quickly and scaling back our costs to align with the current climate was the responsible path.”
Impacted employees in North America are being provided severance packages including six weeks of pay, health coverage through the end of the year, a laptop and job support, according to the company. Employees in other countries are receiving “comparable packages.”
There have been numerous fast-growing companies in Atlanta that have announced layoffs since the beginning of the summer. Tech investors are trading a growth mindset for a focus on profitability. That profitability focus has decreased company valuations, which were based on projections rather than actual revenue.
Startups are less likely to raise money if their valuations have dipped since they last pitched to investors. Plus, high interest rates have made borrowing capital more expensive.
In May, marketing software firm Terminus announced it was making layoffs a year after raising $90 million. It was widely considered as a company on its way to a $1 billion valuation. In subsequent months, restaurant technology startup Sunday and data privacy company OneTrust LLC also announced layoffs.
Last month, Atlanta Inno reported that FullStory raised $24 million from European-based global investment firm Permira. That investment was made a year after FullStory had reached a $1 billion valuation when it raised a $103 million Series D round led by the same firm.
“Given current market conditions, FullStory felt that now was a very opportune time to take on additional capital to grow the business globally and cement our leadership position in DXI,” a spokesperson told Atlanta Inno after the raise.
FullStory was founded by former Google engineers in 2014. It provides insights to companies into customers’ digital experiences by tracking and analyzing their activity on a website.
During the Covid-19 pandemic, the company’s products saw an increase in demand as businesses started to digitize their operations and more consumers used online products. It became the fourth Atlanta company to become a unicorn last year along with scheduling startup Calendly, sales engagement platform Salesloft and crime surveillance startup Flock Safety.
Following its 2021 raise, FullStory told Atlanta Inno it would use the funding for an international expansion and hiring spree. At the time, the company has more than 3,100 customers in over 60 countries, including Chipotle, Peloton and Fidelity.
