Computer-vision startup Tractable, last valued at $1 billion, has laid off a substantial portion of its workforce despite the AI boom. The company, which applies artificial intelligence to analyze photos of damage to cars and homes to aid insurers when evaluating repair costs, dismissed 10 to 15 employees in September 2022 and more in January of 2023, reaching seven countries.
Despite the current trend of investors pouring capital into AI startups, Tractable were forced to make the difficult decision to lay off staff in order to promise future growth in 2023. The startup was initially founded in 2015 by CEO Alex Dalyac, chief technology officer Razvan Ranca, and ex-president Adrien Cohen and have offices in New York and London.
In 2021, the startup was able to benefit from the tech upswing and gather sufficient funds to value themselves at above $1 billion when they secured a $60 million Series D investment from New York-based private equity firm Insight Partners and Toronto-based venture firm Georgian.
Regardless, reaping the benefits of the tech bull run has not been enough to ward off the effects of the global tech downturn and the company’s financials for the year ending December 2021 demonstrate an increase in losses. Employees have had to be let go, as VCs are now rewarding profit instead of growth, regardless of losses.
However, the company are confident that their restructuring will put them in good stead for the future. Tractable- which is currently loss-making- still remain a going concern due to a $40 million revolving credit facility from the Canadian Imperial Bank of Commerce.
It is clear that the global economy has had a negative effect on many companies, and Tractable is just one of many inspiring, innovative tech startups that are struggling to keep up with the unpredictable economic environment. Despite this, it appears that the company has been able to make adjustments to their process in order to once again find success in the future.
