PropTech Casavo cuts 30% of workers
Casavoan Italian startup active in the real estate sector, has announced its intention to lay off 30% of its workforce, stating that it will face a complex phase due to the difficulties of the residential and capital markets. According to the communications of the past months, the platform PropTech ha over 450 employees. Founded in 2017 by George Tinacci – who also holds the position of CEO – Casavo had announced an important €400 million capital raised in July 2022 (funding round led by Exor with the participation of Neva SGR of the group Intesa Sanpaolo) and more recently had also registered an investment from UniCredit.
In a message to employees, Tinacci said that “residential market dynamics affect our business performance and equity capital markets for tech companies affect our ability to access external finance.” According to the CEO, i residential markets “should go through a downward cycle due to the increase in interest rates and the broader inflationary environment” and therefore Casavo cannot “exclude the possibility of reduced volumes, longer sales cycles and potentially declining prices”.
External funding blocked
Furthermore, i equity capital markets for high-growth tech companies are in a ‘reset’ phase, with sharply diminished valuations and extremely cautious investors. As a result, “it would be irresponsible to rely on additional short-term external financing – he explained – This implies the need to achieve financial self-sustainability as soon as possible and fortunately we are in a solid position thanks to our recent series D round”.
Among the initiatives implemented, in addition to the layoffs, there is the downsizing of the iBuying project, the focus on core markets (with the suspension of select markets that are still unprofitable or small-scale) and the shift from a “growth” framework to a focus on “profitability“.
“Although we have always had a timeline of breakeven clear, the market environment forces us to take more drastic actions when it comes to active cost management,” he added.