Just four months after raising $5 million in Series A funding, Proposify has laid off 25 percent of its staff.
“Today is a day every business owner hopes they never face; I made the difficult decision to lay off 25 employees at Proposify,” Kyle Racki, the startup’s co-founder and CEO wrote in a LinkedIn post this week.
Proposify is an online proposal solution startup.
Racki conceded that in 2021 Proposify “ramped up hiring ahead of revenue to hit some aggressive growth targets” that it failed to realize.
Racki said in order for the online proposal solution startup to be sustainable it needed to be right-sized. He conceded that in 2021 Proposify “ramped up hiring ahead of revenue to hit some aggressive growth targets that as a company we failed to realize.”
Racki did not respond to BetaKit’s request for comment.
It’s unclear what the layoffs might mean for future funding rounds for the startup. Proposify’s last funding round from the Canadian Business Growth Fund (CBGF), and Innovacorp were structured as a tranche. The latter is a form of investment designed to ensure companies meet certain milestones.
Over the last year, CBGF and Innovacorp have invested $13 million in Proposify.
Despite the setback, Racki insisted in his LinkedIn post that the startup is “thriving in a growing category with many exciting plans ahead.”
Racki claims Proposify has over 10,000 customers, that the startup grew 18 percent in 2021, and that it will release into beta in 2022 what he referred to as a game-changing product.
“The future is bright, but to get there we have to get lean and refocus,” the CEO wrote.
It’s not the first time Racki has faced difficult circumstances. A 2016 profile of the founder in Time Magazine recounted how after he started Proposify in 2013, with co-founder Kevin Springer, everything began to go wrong.
Among other things, Racki told the magazine that the digital agency he was also running at the time ran into debt, and selling it turned into “a lengthy and arduous task.” He also faced a number of personal crises.
“A low point came when Racki was driving across a bridge to Halifax and realized he didn’t have enough money to pay the toll,” the Time story recollected.
But shortly after, Proposify brought in its first customers.
In 2019, Proposify developed Proposify for Salesforce, a proposal editor inside the Salesforce CRM, enabling the creation, editing and sending of sales documents.
Previously, the company received $250,000 in seed funding from Innovacorp in May 2014. In 2018, Clearwater Seafoods co-founder John Risley, and chairman of the Columbus Capital Corporation Brenden Paddick led a $3 million round of seed funding with Innovacorp participating.
Racki’s LinkedIn post drew 100 comments, many of them from other tech founders encouraging Proposify’s laid off employees to apply for work with them.
As Racki noted in his post: “Since the beginning, I’ve been fortunate to find smart, talented people to help build Proposify into what it is today. Today we said goodbye to some of them.”
Feature image from Proposify via Twitter