A dozen staff at CXA Group were laid off as investors want to see a «clear path to profitability», according to the chief executive at the insurtech startup.

Chief executive of CXA Group Rosaline Koo said that only 12 staff in Singapore, out of a 319-strong regional team, have been laid off. These roles were mainly in marketing and other roles that involved «manual processing», which have been automated.

«Post-WeWork, every investor talking to us... conveyed that they needed to see a clear path to profitability, (with) layoffs being part and parcel of a company's journey as it automates functions away, creating redundancy in teams,» said Koo, who was quoted in «Business Times». 

On Track

«Part of it is really just to make sure we become profitable; we are pretty much on track as we grew revenue by 50 percent last year... We can't cut that much because we're growing. You don't want to cut to the bone,» she added. For now, the firm is targeting to break even in the first half of 2021.

Based on regulatory filings of CXA Group Pte Ltd (which may not fully reflect the company's financials), CXA recorded an S$17.5 million loss in 2018, on the back of S$18 million revenue for the year. Its financial statement for 2019 is not available. 

Backers From Big Players

Founded in 2013, CXA has raised US$58 million to date, according to Crunchbase, from backers including HSBC, Singtel Innov8, the Singapore Economic Development Board's investment arm EDBI and B Capital Group, the venture firm of Facebook co-founder Eduardo Saverin. The streamlining activities could help with the fundraising process of CXA Group, which seeks to raise US$50 million in Series C funds. 

Earlier this week, online news outlet «Tech In Asia» reported that dozens of employees» were let go, with one source specifying that the startup plans to retrench about 40 staff in the engineering, product development, and marketing departments. However, Koo denied this, saying that no further cuts have been planned. 

The startup is also building up a tech hub in Vietnam, where it has hired 70 developers in recent months.