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Fishers-based software company Formstack, which raised a state record $425 million growth investment in late 2021, eliminated a significant percentage of its workforce on Wednesday.
“Formstack is saying goodbye to some wonderful people,” Formstack CEO Chris Byers said in a post on his LinkedIn account.
Byers’ post did not say how many people are losing their jobs, and he did not respond to voicemail and text messages Wednesday evening seeking more details about the layoffs.
But according to other LinkedIn posts from multiple people who said they were among those laid off, the company reduced its head count by 40%. Posts from two separate laid-off employees put the number of people affected at more than 100.
The laid-off employees’ profiles indicate that the cuts spanned multiple departments at Formstack, including marketing, public relations, human resources, customer service, sales and product design.
“These decisions are part of a larger plan to put Formstack in a place to continue to succeed and grow for the long term,” Byers wrote. “As a part of this restructuring, we will streamline internal processes and simplify our operating model to ensure we continue to provide our customers the experience they require.”
It’s unclear how many of those affected live in the Indianapolis area. Formstack has operated as a remote-only company since 2012, and the LinkedIn profiles of people who said they had been laid off indicate that those affected live in the Indianapolis area but also a range of other places, including Vermont, Georgia, Colorado, Virginia, and Ontario, Canada.
Formstack offers a digital platform that allows customers to create paperless forms and documents and collect online signatures.
The $425 million the company raised in 2021 is the largest single capital raise by an Indiana-based technology company in the state’s history. That round of investment was led by PSG, a growth equity firm with offices in Boston, Kansas City, Missouri, and London, and by Boston-based growth equity firm Silversmith Capital Partners.
At the time of the investment, Formstack had 260 employees, about 60 of whom lived in the Indianapolis area.
Formstack, which launched in 2006, has seen significant growth over the years.
The company has been on IBJ’s Fast 25 list of fastest-growing privately held companies five times, most recently in 2021. According to information submitted to IBJ as part of its Fast 25 nomination, Formstack saw revenue growth of 167% from 2018 to 2020 and grew its headcount from 151 employees to 249 during that same period. The company reported revenue of $41.3 million in 2020.
Formstack is just the latest in a growing list of tech companies that have cut jobs during the tech-industry downturn that began about a year ago.
According to layoffs.fyi, a website that tracks layoffs at tech companies, so far this year, 687 companies around the world have conducted layoffs, affecting a total of 197,837 employees. In 2022, the website says, 1,056 companies laid off 164,591 employees.
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Another sign of the choppy waters for VC-backed tech firms. New investments are very difficult to come by, and when they do, it is often at depressed valuations. So companies are reacting by trimming the sails and extended the cash runway before things get to tight. Too bad for those let go. 40% is a very big % cut.
Amazing that a company 15 years old with revenue of $41M is somehow able to raise 10x for new “investment”. The product line sounds very generic so I wonder how they were pitching future growth.
Also would be curious how much in government incentives and tax breaks they have collected over the years.