Video game coaching market Metafy cuts 23% of its staff despite doubling its revenue

Metafy, a marketplace for video game coaching, laid off 23% of its staff last week, primarily affecting product, design and engineering teams, confirmed founder Joshua Fabian in an email to TechCrunch. The layoff affected 12 full-time employees. A Notion page has been created for those looking for their next job.

Metafy has raised over $30 million in known funding from Tiger Global, Seven Seven Six, Forerunner, DCM and others. The layoffs were preceded by pay cuts for the management team, Fabian said.

"I'm not crazy about the ivory tower bullshit. The cuts have impacted roles that once made sense for the company, but are now hard to justify. No one laid off has nothing wrong, and that's not a reflection of their work ethic," Fabian wrote in an email to TechCrunch. "The needs of the business have simply changed as it has grown and its evolution over the last two years."

All affected, says Fabian, were offered three months of severance pay and extended health care, regardless of tenure. For people who had been with Metafy for less than a year, the equity cliffs were lifted. The startup also provided a subscription to LinkedIn pro.

Metafy's mobile teams (iOS and Android) have been hit hardest by the downsizing, as the company says it now wants to rely on React Native, a single codebase that doesn't require two iOS teams and separate Android.

As for what went wrong, it's a similar story for many startups adjusting to the "new normal" of a more disciplined environment. Metafy last raised its Series A round in February 2022, "when things were rosy," according to Fabian, who planned to raise a Series B round months later.

"If you raised funds last year, the priorities were GMV and growth, not the economy or unit revenue. There's a new normal, if you want to stay alive, there is no choice but to become more disciplined not only with spending, but also with product vision and direction," Fabian said. "My regret is that I waited as long as we l 'Have done. It caused unnecessary pain. We learned a valuable lesson, but we did it the hard way. »

The founder, who opted for a more transparent explanation of the layoffs compared to some of his fellow entrepreneurs, added that: "It's my fault." Fabian also posted a public investor update, including most recent cash burn, active students and coaches, and cash on hand (now at $18.4 million).< /p>

There is an excerpt from the Investor Update that focuses more specifically on the company's finances:

The second quarter is coming to an end and, I'm happy to say, we had a hell of a quarter. June was our best month ever for GMV, AOV, Game Distribution, and Total Active Coaches. The market looks like a bloodbath, but thanks to a weirdly specific fortune cookie, I never swim without my floaties. You are in good hands.

In response to the market, we have made it a priority to be much smarter about our unit economics. More to come soon. Thanks to the work of our team of success experts, our experts continue to get smarter in running their businesses. Our Outreach team also found a reproducible model of linear growth. We cook with gas now.

Speaking of, let's cut to the chase.

Q2 Breakdown:

Active Coaches: 570 -> 686 (+20.4%)

Active students: 1,812 -> 3,337 (+84.2%)

Booked sessions: 2549 -> 5733 (+124.9%)

Monthly GMV/Revenue: $185,975 -> $375,971 (+102.2%)

Cash: $18,388,055

Monthly return: ~$1.3M (does not reflect Q3 layoffs)

In other words, in the last quarter, the company increased the number of active coaches and active students, which resulted in over 100% growth in monthly GMV and revenue. The move toward layoffs seems like a step toward operating a leaner business, especially given the time cost associated with one-on-one video game advice.

Layoffs help Metafy cut staff...