Source: Ngozi Chukwu/Techcabal
Web3 startup Mara has laid off employees twice in the past six months. The first layoffs in December, coincided with the resignation of a co-founder Kate Kallot and the collapse of crypto exchange FTX, sister company of Alameda Research, one of Mara’s investors.
The startup told TechCabal that the job cuts had nothing to do with the crash of the exchange. But the second round of layoffs, which happened last month, is contentious. While one report described a pattern of frivolous spending, a source told TechCabal that the startup restructured the team with a renewed focus on existing users, launching other projects that will drive crypto adoption in Africa.
Former employees who spoke to TechCabal said the first layoffs were about cost reduction. A source with knowledge of the situation told TechCabal, “It was obvious that the layoff in December was a scramble to save some money because after laying off nearly half of the staff, [Mara] slashed salaries the next month. The slashes varied too, ranging from 10-50% reduction.”
There were reasons to be concerned. The first layoff in December came only six months after Mara announced a $23 million fundraise. The seed raise—the largest for a web3 startup then—would help Mara launch Mara Wallet, a crypto exchange for users to buy, send, sell, and withdraw fiat and crypto assets. It put Mara in competition with startups like Yellow Card.
The company claimed that its unique selling position was Mara Chain. This layer-1 blockchain would let Africans build decentralized applications—Mara Chain was scheduled to launch in Q4 2022. But the startup didn’t launch Mara Chain as planned, and it is unclear what the progress of that project is.
The recent layoffs happened in May, and about 6 people were affected. “The cuts mostly affected external-facing roles such as marketing, community management, and communications—roles that involve external communications and customer or user acquisition,” the source said.
According to another source, however, more people in other departments may have been sacked too. But it appears that the startup has not frozen hiring. A source disclosed to TechCabal that the company added several engineers to the team despite the layoffs. Mara did not respond to a request for comment at the time of publishing this article.
Source: Ngozi Chukwu/Techcabal
