Minneapolis-based fintech startup Kaleidoscope recently laid off about 30% of its workforce, the company has confirmed.
Kaleidoscope, which has a platform that allows organizations to fund, design and administer branded scholarships and grant programs, let go 15 full-time employees mid-February. That figure puts Kaleidoscope's headcount at about 50 employees prior to the layoffs, based on information provided by the company.
"Like a number of other high-growth software companies, Kaleidoscope hired ahead of its needs over the past couple of years,” Chief Financial Officer Jody Johnson said in an email to Minne Inno. The company "recently reduced its headcount to bring expenses inline with its revenues to ensure that the company is in a terrific position moving forward."
The layoffs were part of a company reorganization for a "more focused business strategy" to launch Kaleidoscope into its next phase of growth, Johnson said. The company expects to double its revenue in 2023, with product enhancements occurring this year.
Kaleidoscope's founder, Greg Dehn, is also stepping down from his role as CEO. "As is often the case with high-growth startups, Greg felt that now was the right time to pass the torch to the next CEO who will lead Kaleidoscope into its next great chapter of growth," Johnson said.
Founded in 2017, Kaleidoscope has facilitated over $370 million in scholarships and grants given to students, pairing applicants with organizations that sponsor scholarship programs. In 2021, Kaleidoscope launched more than 6,500 programs and reached over 1 million users, Minne Inno previously reported.
Students can use Kaleidoscope for free, allowing them to use the same information for several scholarships. Organizations or individuals opting to fund students are charged to build and list on the platform.
Last spring, Kaleidoscope announced it had raised $10 million in Series A funding. The round brought the company’s total amount of funding to $16 million, Minne Inno reported. Kaleidoscope was also one of the companies to be in gener8tor's first Minneapolis accelerator in 2017.
Kaleidoscope is not the only tech company to experience layoffs locally. In November, Minneapolis software and data security firm Code42 confirmed that it had laid off about 15% of its workforce, the Business Journal reported. Code42 had attributed the layoffs in part to an uncertain economic outlook in 2023.
Globally, tech layoffs, both by number of employees and companies, in the first quarter of 2023 reached their highest levels since the Covid-19 pandemic began, according to Layoffs.fyi, a layoff tracker. Among the more recent companies to undergo such workforce reductions were Microsoft and Google’s parent, Alphabet.
