What the business is
San Francisco AI software that detects fraud in business underwriting, tenant screening and customer onboarding for financial firms
The bet
Shrinking sales and operations and rebuilding the product around new AI capabilities would serve fintech customers better than the old plan of doubling headcount
Starting capital
$38 million raised in total, including a $25 million Series B in January 2023
How it started
In January 2023 Inscribe raised a $25M Series B led by Threshold Ventures, with Crosslink Capital, Foundry, Uncork Capital and others, bringing its total to $38M. At the time it forecast doubling its 50-person workforce over the next 12 to 18 months.
What happened
According to TechCrunch's sources, the board recommended cuts because the market caused the startup to miss revenue goals for over a year. CEO Ronan Burke said fintech customers faced higher interest rates and an uncertain consumer outlook, while 2023's AI advances opened a large opportunity. In Q4 2023 the company set a new product strategy, and in January 2024 it cut the team by just under 40%, mostly in go-to-market and operational roles.
How it ended up
As of March 2024 Inscribe had about 60 employees or more (per LinkedIn and PitchBook, as TechCrunch cited them) and said a large product launch tied to the new strategy was planned for later in 2024.
What has to be true
Revenue goals were missed for over a year, according to TechCrunch's sources
Fintech customers faced higher rates and an uncertain consumer outlook, which slowed their spending
Inscribe saw 2023's AI advances as a reason to rebuild its product rather than keep selling the old one
The Series B-era plan to double headcount no longer matched actual revenue, so the team was cut mostly in sales and operations
What can be applied
A hiring plan tied to a funding round assumes the revenue arrives; when it does not, the team has to be cut to match, and the product strategy has to change with it.
Aftermath
As of 2024-03-08, Inscribe was running with a team about 40% smaller, mostly cut from go-to-market and operations, and said a major product launch under its new strategy was planned for later in 2024. The company did not state a runway or a new funding plan in the TechCrunch report.
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