Australian social media company Linktree loses $50 million in one year

One century Australian technology company once hailed as the next big thing lost $50 million in the space of a year.

Linktree, which allows people to connect their various social media and personal brands on one website, lost $49.2 million in the fiscal year ending in June.

The staggering figure was quietly entered into a report the billion-dollar company submitted to the corporate regulator, ASIC, in December, according to Sydney Morning Herald.

The company was struggling last year, after news in August that it would lay off 17 percent of its staff from its global operations due to difficult market conditions and too rapid expansion.

It comes as the entire tech industry is going through a “meltdown” amid a looming recession.

According to the filing, Linktree generated $25 million in revenue in 2022.

This is higher than the previous year, when they generated $13 million in revenue.

But at the same time, they incurred losses totaling $49.2 million.

The huge loss was attributed to corporate spending, which far exceeded previous years. By comparison – in 2021, Linktree lost just $3 million in revenue.

They claim that the number of people using their website has grown by 76 percent.

The news comes even though the company, which is backed by billionaire Afterpay co-founder Nick Molnar, raised US$110m (AU$1,578m) in March 2022.

Linktree was recently valued at $1.78 billion and says it has 25 million users and is among the top 300 sites globally with 1.2 billion monthly views.

Brothers Alex and Anthony Zacharias launched Linktree in 2016, and a third co-founder, Nick Humphries, also joined.

The company is said to have around 250 employees globally – having laid off around 50 of them.

In a statement to news.com.au, a Linktree spokesperson attributed the losses to the fact that the company was in a “hypergrowth phase”.

Most of the money was spent on expansion into other global markets and marketing strategies to grow the land.

“Our continued growth and focus on capital efficiency gives us a clear path to profitability,” the spokesperson added.

Current market conditions have seen many tech companies, both large and small, cut jobs or go under as they struggle to stay afloat in the turbulent market.

A month ago, an Australian businessman pointed to a tragic image of an office chair graveyard in signs of mass layoffs in the technology sector.

In November, the Australian branch of delivery giant Deliveroo went into administration as the company failed to turn a profit. Also in November, cryptocurrency exchange FTX filed for bankruptcy.

Then there was Metigy, an artificial intelligence platform, which made headlines for owing $32 million to investors due to its collapse.

Melbourne-based esports company Order, which raised $5.3m in funding last year, has also collapsed, with liquidators seeking to sell the company quickly.

In July Volt Bank, Australia’s first ever new bank, was founded, with 140 staff losing their jobs and 6,000 customers being told to urgently withdraw their money.

Other failed companies include grocery delivery service Send, which was liquidated at the end of May — after the company spent $11 million in eight months to stay afloat. non-profitable.

Many Australian technology companies have also reduced their workforce in hopes of saving money.

Cryptocurrency exchange Swyftx laid off one in five of its employees in August, while a Brisbane-based company, a telecoms and IT infrastructure company called Megaport, revealed it had spent a whopping $1.6 million to pay a 10 percent cut to the staff it had made. frequent.

Originally published as Australian social media company Linktree losing $50m a year

Related Posts