Startup Santa to sack most of its employees
Startup Santa to sack most of its employees
“With a heavy heart we decided that we need to take a few steps back, reduce our burn to near-zero, and use the next few months to completely rethink our direction,” wrote CEO Roee Adler
Israeli startup Santa is laying off most of its employees and is considering returning the money it raised to its investors.
Santa was founded two years ago by CEO Roee Adler, a former SVP at WeWork, COO Menachem Katz, Head of WeWork Food Labs, and Shai Wininger, the co-founder of insurtech company Lemonade.
Santa was launched with the aim of becoming a digital gifting retailer that offers curated assortments of apparel, accessories, wellness, and tech, through its app, which can then be delivered directly.
The company raised $13 million led by Aleph at a $40 million valuation. It employs several dozen employees, mostly in Tel Aviv.
“Dear friends, today I have some difficult news to share,” Adler wrote on social media. “We started Santa two years ago with an ambitious vision, a strong team and great support from top investors. Within 10 months we built and launched a complex product, bringing a new kind of digital/physical shopping experience to people’s front doors. Customers loved it and revenues were growing.”
However, Adler noted that the company “also learned that creating the level of service we wished for comes at a cost that results in unsustainable unit economics, in a way that has a very low likelihood of being resolved at scale.”
“Santa is a well funded company with most of the funds raised still in our bank account, and we have the best investors entrepreneurs can hope for, investors who supported our ambitions and helped us aim for the stars," he added. "Our commitment to them as founders is to protect their capital and put it to the best use we can imagine. It's easy to confuse money-in-the-bank with business success, but it’s our responsibility to acknowledge fundamental issues and act swiftly and decisively, instead of continuing to throw money away on trying to fix the unfixable.
“Therefore, with a heavy heart we decided that we need to take a few steps back, reduce our burn to near-zero, and use the next few months to completely rethink our direction. Unfortunately this comes at the terrible price of dramatically reducing our amazing, superstar, incredible, kind, professional, fun and beloved team who gave their hearts and souls to help us pursue this big dream.
“This is a difficult day. The startup journey isn’t for the faint of heart. The highs can be the highest and the lows can be the lowest. I, for one, wouldn’t have it any other way. Santa’s founders will now go back to work, we have a big task ahead of us.”
