Today, I made the difficult decision to reduce the size of the Socure workforce.
For a company like ours that’s been so relentlessly focused on the success of our people and investing in innovation for the future of digital identity, this is incredibly painful to do. But today we must say goodbye to 104 of our teammates.
In the next few minutes, all team members that have been impacted by this change will receive an email notification and calendar invite for a 1:1 conversation about your separation package, and so that we can answer any questions you might have. All impacted team members will also have their access removed to all sensitive systems given the responsibility we have and the critical partner role we play for so many organizations. However, your email will remain active until after your 1:1 conversations.
I want to share as many details as I can about how we as a leadership team arrived at this very difficult decision.
How we got here
In 2020 and 2021, we benefited from the rush to digitize everything in a favorable, low-interest economy. We saw huge spikes in demand, far beyond our expectations, across consumer fintech, the top 50 banks, payments, gaming, crypto, eCommerce and a number of the other core markets that we serve today. The growth was so rapid that we struggled to keep up as we just didn’t have enough team members.
In response, we raised hundreds of millions of dollars in 2021 and more than doubled our headcount as revenue grew 110% YoY in 2021 and our customer count swelled by almost 800. With a huge ’21 in our rearview mirror, we built a bold ’22 plan to not only double again but also to continue to forward invest for ‘23-‘25 hypergrowth.
We stepped on the hiring gas pedal in ‘21, a few quarters before the macro economy slammed on the brakes in ‘22. This resulted in a huge increase in net-new headcount expense right as the economy and our customers hit pause or slowed down with uncertainty mounting – and in extreme cases, we have seen some fintech, gaming and crypto partners unfortunately have to close their doors entirely.
The market reality means that we must part ways with many talented teammates, and those who have made enormous contributions to our success. If you are part of the group that has been impacted, I am sorry. I made these investment decisions and I bear the accountability for them. These decisions are not a reflection of you, your work, or your potential. Teams across the entire company will be impacted today.
The changes we are making today will enable the company to continue to build on a strong and profitable foundation.
Supporting Departing Socureans
To our departing Socureans, there is certainly no easy way to do this, but our goal is to treat you the same way you came in, with compassion, care, and respect. During your 1:1 sessions you will receive detailed information about your separation, including continued health benefits, mental wellness support and outplacement support.
To those of you staying, please remember to honor those who are leaving as their contributions will always be part of Socure’s story. I am confident their work will live on as we achieve our mission.
Looking to the Future
Today is a very difficult day for all of us, and I am sure many of you have questions and a desire for further information. This afternoon and tomorrow morning we will come together for an all-hands meeting where the leadership team will provide further details regarding our forward strategic plan.
The shift from physical to digital, and demand for identity verification and fraud prediction grows stronger by the day. We remain focused on delivering against our mission to verify 100% of good identities and completely eliminate identity fraud.
However, to execute on this mission, we must drive to profitability more quickly than previously planned. So while today’s changes are painful, they are also necessary. We must enter 2023 with an extremely prioritized strategic plan to focus innovation in our core products, scale in enterprise customers and essential markets, and deliver with smaller, more nimble teams.
Our outlook remains strong – and our mission is more important now than ever before. In recessionary times, fraud goes up. In the past 6 months we have seen and stopped more fraud attacks against our customers than in the entire 10-year history of the company. As the growth of the internet continues, the need to verify 100% of good identities equitability and across all demographics only spans a larger surface area – in government, marketplaces, fintech, gaming, healthcare, insurance and at a global scale. Socure will be there to solve these enormous problems and be the core strategic partner that we are today for our 1,700+ customers.
Our partners will continue to require solutions to stop synthetic identity fraud, money laundering, stolen identities, payment risk and to maximize their conversion rates of good consumers. They will require accuracy, automation, innovation, low latency and world class support. Socure delivers a critical infrastructure layer of the internet (and in many use cases across the physical world) in fulfilling regulatory compliance, reputational risk, and the establishment of trust between two parties.
I could not be more proud of what we have accomplished to date or more optimistic about what’s in front of Socure, but we must get there profitably and more efficiently.
Socure is the market leader for identity verification and fraud prevention, with a very strong balance sheet and tremendous SaaS metrics. Our team will be a bit smaller than planned for ’23 but the determination, perseverance and desire to build something truly great and longstanding for our customers is what will drive us forward.
Johnny Ayers is founder and CEO of Socure. Since founding the company in 2012, he has had a number of roles, including managing and leading strategy for the Direct Sales, Channel, Product, and Growth organizations. Johnny has been instrumental in building the company's tremendous customer base and suite of industry-leading digital identity verification and fraud prevention solutions. He is also a frequent expert speaker on fraud, authentication, and KYC/AML, and has been quoted in publications such as the WSJ, Forbes, Bloomberg, Thomson Reuters, Cheddar, PYMNTS.com, and more. In 2022 he was awarded Ernst & Young’s Entrepreneur of the Year, Finovate Executive of the Year, and has been named by Goldman Sachs as one of the top 100 Entrepreneurs of 2021 and 2022. Outside of Socure, Johnny is an investor in and an advisor to companies including; Acorns, Alloy, Astra, Bask, BillGo, Chipper Cash, Commerce Ventures, Curve, MoCaFi, and more.
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