One Zero embarks on further layoffs as Generali halts Italian digital bank launch
One Zero embarks on further layoffs as Generali halts Italian digital bank launch
One Zero lost around $170 million between 2022 and 2023 due to establishment costs as well as ongoing expenses such as salaries and marketing. The bank still expects to reach profitability by the end of 2025.
Italian giant Generali has frozen its joint venture with Israel's One Zero to establish a digital bank in Italy. In a letter to employees, One Zero emphasized that this is only a temporary delay until the security situation stabilizes. However, estimates suggest that there is a slim chance the project will ultimately come to fruition. Generali did not respond to requests for comment.
Despite growth in its activity, One Zero is still operating at a loss, and the bank will undergo cutbacks, with 23 employees—representing 6.5% of its workforce of approximately 350—being laid off. These layoffs will occur across various divisions, with the service division remaining unaffected.
Earlier this year, One Zero announced its intention to expand abroad in partnership with the Italian bank Generali, the third-largest private bank in Italy. Generali, part of the Generali Group (which previously owned Israel's Migdal Insurance until selling it to Shlomo Eliahu in 2012), signed a memorandum of understanding with One Zero to establish a digital bank in Italy, leveraging One Zero's technological infrastructure.
According to the original plan, the joint venture was expected to recruit over 100 employees, including development and banking personnel, in Italy. The initial investment was estimated at $40-50 million, jointly funded by One Zero and Generali. The project was set to begin in mid-2024 and last about a year.
One Zero CEO Gal Bar Dea explained the decision in a letter to employees: "Before the war, we began the process of expanding the bank internationally. This was part of the business plan we had from the outset, where we invested in developing technology designed to support global expansion in multiple languages and currencies. We chose Italy as the first country to launch this initiative and partnered with well-known international entities. The plan still stands, and we remain committed to it, but due to the war and the associated uncertainty, the project has been delayed until calm and security are restored. For now, our focus remains on growing the bank in Israel and achieving profitability."
Bar Dea’s explanation, however, omits the fact that the bank announced the project’s launch in January 2024, when Israel was already in the midst of the war.
As part of the planned international expansion, One Zero also intended to undergo an organizational restructuring, including separating the Israeli bank from the technology company that would develop the product in Italy and manage future global growth. Bar Dea was expected to step down as CEO of the Israeli bank to lead the technology company, with Eyal Gafni already appointed as his successor. However, the freeze on the project leaves Bar Dea in his current role, with Gafni working under him as joint CEO.
This round of layoffs marks the second for One Zero this year. In January, the bank laid off over 30 employees, bringing the total number of layoffs in 2024 to over 50, representing 14% of its workforce. Despite the layoffs, the bank continues to recruit, recently launching a new bankers' training program.
Since it began operations in 2022, One Zero has raised approximately NIS 1 billion from investors, led by Amnon Shashua. Between 2022 and 2023, the bank lost NIS 620 million, due to establishment costs as well as ongoing expenses such as salaries and marketing. The bank expects to reach profitability by the end of 2025.
While One Zero offers competitive pricing for its banking products, it has yet to make a significant impact on the market or shift the balance of market share in the banking sector. In his letter to employees, Bar Dea noted that the bank is growing, with its deposit balance increasing by 62% over the past 12 months to NIS 2.34 billion—out of a total household market in Israel worth hundreds of billions of shekels. The bank’s credit portfolio also grew by 75%, but it remains relatively small at NIS 312 million.
Shashua, known as a serial entrepreneur, is most famous for co-founding Mobileye with Ziv Aviram. Mobileye, sold to Intel for $15 billion and later issued at a value of $16.7 billion, is currently facing challenges. Last Friday, Mobileye’s stock dropped 9%, reducing its value to under $10 billion, following reports that Intel is considering selling a stake in the company.
Meanwhile, another of Shashua and Aviram’s ventures, Orcam, which developed a computerized vision device for the visually impaired, has significantly downsized. Orcam, which once employed 400 people, has now closed its development activities and is left with only a few dozen employees. One Zero’s shares were acquired by Shashua from Marius Nacht, one of Check Point’s co-founders, who was initially the largest investor in the venture but decided to sell his stake.
