How the crypto bank will continue

Tech stocks and cryptocurrencies have often lost 50 percent or more of their market value since the beginning of the year. The same correction now seems to be reflected in the valuation of start-ups. There have been recent reports that start-ups and fintechs are coming under increasing pressure in terms of their valuations and financing. Klarna is one such example, as is the bank start-up Kontist. With Nuri, the Berlin cryptocurrency flagship start-up, which was able to shine with strong growth figures especially in the previous year, is now hit.

Last week, it became known that Nuri would have to lay off about 20 percent or 45 employees – reported BTC-ECHO.

Nuri boss Kristina Walcker-Mayer is open about the stress of recent days. She makes no secret of how exhausting it was to plan the strategy change behind closed doors. She is visibly relieved to “return to 100 percent transparency”.

In the interview, the CEO gives a deep insight into the situation Nuri – and the start-up scene in general – is in right now.

Nuri: Review needed?

The job cuts suggest that Nuri needs fresh capital in the near future. If you look at the balance sheet numbers, like the magazine financial scene made a few days ago, then doubts arise about the adequate capital resources. The brute growth – scaling, as it is called – is ultimately accompanied by a significant combustion rate.

Kristina Walcker-Mayer does not wish to comment on the current status of the financing process. However, she assures you that you are in permanent contact with investors. It is understandably unanswered whether the crypto bank Nuri, which was valued at 144 million euros in the last round of financing, should accept a so-called flat or down round (the valuation stagnates or even falls). That would certainly be conceivable in the current market environment.

Venture capitalists regroup

In the current difficult macro situation, the Nuri director wants more clarity. Walcker-Mayer tells BTC-ECHO: “What you can definitely see is that the parameters have changed, giving an attractive start-up on our scene. In general, this development in the VC market in Germany has not yet been discussed in detail. ” As the discussion in the American media is already further ahead.

For this reason, in your letter to Nuri you would have tried to classify what it means, among other things, for the financing of start-ups if capital becomes more expensive or key interest rates rise markedly and a Ukraine war worries investors.

The partly exaggerated reviews of the last few years are now facing a new reality. “Last year, there was already talk that the prices paid for some start-ups could no longer be justified by the sales projections for the next few years,” Kristina Walcker-Mayer explains in an interview with BTC-ECHO. In the meantime, however, the same demand has stalled abruptly as she goes on to explain: “Especially in the US, there is concern that we are heading into a recession, like the dot-com bubble. But even VCs “Germany is a bit more optimistic, the uncertainty is huge, they stay away from larger groups and prefer to secure their existing portfolios of start – ups.” As a result, the Nuri director believes it is likely that some start-ups will need to flatten or round off in the next 24 months.

More than courses: the infrastructure remains

Due to the massive price corrections in cryptocurrencies, it is obvious that crypto start-ups are currently coming under particularly strong pressure. However, it is important for Kristina Walcker-Mayer to point out that one does not merge an entire industry. She says: “There are many companies building tomorrow’s infrastructure, including Blockchain Finance and Web 3.0. The value created here must therefore also be seen separately from the development of cryptocurrencies.”

Nuri: That’s how the cuts were implemented

Asked what impact the job cuts will have on the company, the Nuri boss explains that individual items that had been pushed during the strong scaling have now been partially parked. “We have looked at which topics will really matter in the next six months, and where you can most likely let go. Since we do not know how long the difficult macro environment will last, we are taking everything from the table that we do not need today to quickly become profitable. “

In order not to neglect the further development of the company, the focus is primarily on a reorganization of projects. “What we have not done is cut 20 percent of jobs across the board from all departments. Instead, we developed a plan or a new strategy and reunited the teams.” Nuri CEO cites quality management as an example.Until now, this was guaranteed by a dedicated team.This feature is now being integrated into each department so employees are being asked to take greater responsibility for quality assurance.

Outlook for 2022

It is no secret that the year 2022 has so far not been easy for the crypto industry. As Walcker-Mayer admits, Nuri is also faced with lower investment volumes on the part of retail customers. “However, this decline is not as strong for us as we see it on some other platforms where active trading is particularly encouraged,” the CEO stressed. The product range is more aimed at long-term and regular investments, which are less affected by the market situation. One also benefits from the fact that more and more customers are using the classic bank account, detached from the crypto services.

“If we had gone into crypto back then, in 2019, before all-time highlights …”, is a phrase that the Nuri CEO has recently heard frequently from VC investors and retail customers. The relatively low prices are therefore likely to motivate more and more people interested in crypto to buy more or enter the crypto sector. Kristina Walcker-Mayer is sure of that.

In any case, Nuri customers do not have to worry. The crypto bank is subject to the highest regulatory standards. The deposits are at all times 100 percent legally protected, Walcker-Mayer assures.

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