Business
Temasek-backed ShopBack cuts workforce by 24% amid exit from BNPL sector
Temasek-backed ShopBack cuts 24% of its workforce, or 195 jobs, as it exits the BNPL sector. The Singapore-based company aims for focus and sustainability, per CEO Henry Chan. Temasek through its subsidiaries has reportedly invested US112.5 million into the company.
ShopBack, a Singapore-based online shopping rewards platform supported by Temasek, Singapore’s sovereign wealth fund, has announced a significant reduction of its workforce by about a quarter.
This move, reported by Bloomberg, involving the elimination of 195 positions or 24% of its staff, aligns with the company’s strategy to withdraw from the buy-now-pay-later (BNPL) sector.
The announcement was made by Chief Executive Officer Henry Chan in a note to employees, highlighting the company’s efforts to focus on its core operations and achieve sustainability.
The company, which is backed by investors including Temasek, SoftBank Ventures Asia, and Rakuten Capital, has been implementing cost-saving measures since 2022.
These measures include freezing salaries for leadership positions and reducing bonus payouts, as stated by Chan. Despite these efforts, sustainable growth has proved challenging.
Customers were informed via email that ShopBack’s BNPL service would be discontinued in March, although the reasons for this decision were not detailed in the communication.
The BNPL industry has faced difficulties recently, with a downturn in consumer spending amid inflationary pressures and calls for more stringent regulatory oversight to protect consumers.
Chan admitted to strategic errors in expanding the company’s direction and workforce too rapidly, taking full responsibility for the decisions leading to the current situation.
ShopBack, founded in 2014 by Henry Chan and Joel Leong, operates across seven countries in Southeast Asia, in addition to Australia, Taiwan, and Korea.
The platform partners with over 5,000 merchants, offering cashback and rewards for purchases from various brands and retailers.
The acquisition of fintech startup Hoolah in 2021 marked ShopBack’s entry into the BNPL market, a venture the company is now retracting from.
The company has attracted significant investment over the years, raising US$75 million in a funding round in 2020 from Temasek, Rakuten, and EV Growth. Temasek reportedly contributed US$32.5 million, reportedly done through an indirectly owned vehicle called Dahlia Investments.
The company secured an additional $200 million in a Series F round in 2022 from investors, including Westpac Banking Corp. and Asia Partners. Temask’s 65 Equity Partners contributed US$80 million.
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Any accountability from TSMK?
Most likely NO,
coz (they think) it’s their own $$$$
Just like Honest Bee, the business model is simply not viable…
Another GroupOn.
Can Temasek make a break from familiar territory – of losses, more losses, and endless losses. No one doubts they can. Coz as long as lost money do NOT hurt them, so what.
All because of this DIRTY, NON ACCOUNTABLE PAP Administration’s XTRAORDINARY UNIQUELY Singapore ** NO BLAME CULTURE ** which Gan implys that if everyone is blamed, society (PAP only) won’t take risk to progress.
Oh. Who say no one take risks – yes take risks. BUT ALSO MUST ABSORB THE BLAME too SO NO ONE TAKE BLIND RISKS.
It’s not their money they invested in. So loss or make money doesn’t matter as they still get to collect their very fat pay cheques.
Young staffs working there for a few years can become very rich to buy private housing, driving luxurious car
As usual – the results of access to cheap funds, free funds unlimited, that don’t need require deployment accountability, even when decision makers don’t care a hoot for losses bcz, one it’s not their money, so no pain, secondly, no punishment for accruing investment losses – and the have the cheek to say out loud, investments do NOT always guarantee positive returns.
Lee and Dr Tony Tan, ever proclaimed – their investment horizons are 20, 30 years time period.
Never heard or even use…no wonder NEED TO CLOSE SHOP LAH!
Wonder how much CPF linked fund ….lost there!😆😆😆😆
Just another loss chalked up against a privileged and protected lot, … using other peoples monies with nil accountability !!!
Nothing new here, … let’s just move on, until the next “investment” disaster cum crash !!!
Better to cut back your workforce by at least 94%. Ultimately it won’t make a difference to the inevitable outcome ie: bankruptcy and shutdown. BNPL? VERY low barrier to entry. Anybody or their dog can slap up a website to do the same. Without BNPL, what exactly is their “core” service? Without a large domestic market (eg: China), ALL these copycat “unicorns” have no future. However, I’m not surprised that Temasick keeps flinging our laundered CPF money at these start-ups. You know why? Because it is NOT THEIR OWN MONEY. Will any of those fund managers at Temasick put their… Read more »