Airbnb lays off staff even as it raises money from investors

Before the coronavirus, startups raised more funding and spoke of expanding their teams.

Now the equation is being turned on its head, with startups raising more funding but cutting headcount in the hopes of outliving the pandemic’s uncertain economic impact.

Most recently, home-sharing company Airbnb is laying off 1,900 employees, or about 25% of its workforce. It’s also skinnying down by pausing investments that don’t support the “core” business, including in transportation and a studio intended to produce original entertainment related to travel, and reducing funding for a high-end rental service, Luxe. 

“Airbnb’s business has been hit hard, with revenue this year forecasted to be less than half of what we earned in 2019,” CEO Brian Chesky said in an internal memo. “We are collectively living through the most harrowing crisis of our lifetime, and as it began to unfold, global travel came to a standstill.”

The cuts come after Airbnb recently raised $2 billion in debt and equity from the likes of Silver Lake, Sixth Street Partners, BlackRock, and more.

Other startups have bulwarked their cash pile while simultaneously hosting layoffs: Think Carta, which builds software that manages equity in other startups, or People.ai, which raised a debt round while also letting go of about 18% of its staff. Read more

PPP fix: Lawmakers prioritized speed when rolling out the Paycheck Protection Program funding aimed at propping up small business in the middle of an economic meltdown—which left plenty of room for loopholes and issues as the coronavirus drags on.

Now there is a bipartisan push to change PPP guidelines as Congress considers a third round of funding. Restaurants and businesses have been expected to use the money within eight weeks after receiving the loan—which many businesses complain is too short of a time period, especially as the program began roughly four weeks ago.

One proposal from Sen. Michael Bennet (D-Colo.) and Sen. Todd Young (R-Ind.) seeks to finesse the terms, giving businesses 16 weeks instead of eight to spend the funding as long as they show over a 25% revenue loss during the period.

What’s also of note for this proposal: It suggests the Senators believe the impact of the coronavirus will be much, much longer. The duo has proposed loan funding to cover the next six months of payroll, benefits, and fixed operating expenses for companies that have taken a “substantial revenue hit” from the coronavirus. Part of the loan will be forgiven, while the remainder can be repaid over a 7 year period.

Lucinda Shen

Twitter: @shenlucinda

Email: lucinda.shen@fortune.com

VENTURE DEALS

- RWDC Industries, a Singapore-based biotech startup addressing single-use plastics, raised $133 million in Series B funding. Vickers Venture Partners and Flint Hills Resources co-led the round. CPV/CAP Pensionskasse Coop and International SA also participated.

- LetsGetChecked, a New York-based at-home health testing company, raised $71 million in Series C funding. Illumina Ventures and HLM Venture Partners co-led the round, and was joined by investors including Deerfield, CommonFund Capital, and Angeles Investments. Existing investors Transformation Capital, Optum Ventures, and Qiming Venture Partners USA also participated.

- Pulmonx Corporation, a Redwood City, Calif.-based provider of a minimally-invasive treatment for patients with severe emphysema, raised $66 million in funding. Ally Bridge Group led the round, and was joined by investors including Adage Capital Management, HealthQuest Capital, Partner Fund Management, and Rock Springs Capital.

- Zeitgold, a Berlin-based fintech seeking to automate bookkeeping for SMBs, raised $29.2 million (€27 million) in Series B funding. Vintage Investment Partners led the round, and was joined by investors including Battery Ventures, HV Holtzbrinck Ventures, Saban Ventures, btov Partners, AXA Innovation Campus, and Deutsche Bank. Read more.

- Jellyfish, a Boston, Mass.-based engineering management platform, raised $12 million in funding. Investors include Accel and Wing Venture Capital.

- GigaSpaces, a New York-based startup developing in-memory computing for AI workloads, raised $12 million in funding. Fortissimo Capital led the round, and was joined by investors including Claridge Israel and BRM Group. Read more.

- Monogram Health, a Nashville, Tenn.-based kidney disease care management company, raised $7 million in Series A-1 funding. Frist Cressey Ventures and Norwest Venture Partners co-led the round.

- Knock, a Seattle, Wash.-based sales and marketing SaaS platform for residential property management companies, raised $12 million in Series B funding. Madrona Venture Group led the round, and was joined by investors including Lead Edge Capital and Seven Peaks Ventures.

- Wellth, a New York-based platform for behavioral treatments, raised $10 million in Series A funding. yabeo and Boehringer Ingelheim Venture Fund (BIVF) co-led the round.

- Limbix, a Palo Alto, Calif.-based developer of digital therapeutics for adolescent mental health disorders, raised $9 million in Series A funding. GSR Ventures led the round, and was joined by investors including Sequoia Capital, Storm Ventures, NextGen Venture Partners, and BIXINK Therapeutics.

- Treasury Prime, a San Francisco-based API for banking, raised $9 million in a Series A funding. Investors included Amias Gerety (QED), Jason Lemkin (SaaStr), and Hans Morris (NYCA Partners).

- Postal.io, a San Luis, Obispo, Calif. sales and marketing automation platform, raised $9 million in Series A funding led by Mayfield.

- Emtrain, a San Francisco-based platform that helps companies prevent bad workplace culture, raised $8 million in funding. Education Growth Partners led the round.

- Boosted.ai, a New York and Toronto-based distributed machine learning platform for investment professionals, raised $8 million in Series A funding. Portag3 Ventures led the round, and was joined by investors including Dunamu & Partners and Polar Equity Partners.

- First Dollar, an Austin-based t health care savings platform, raised $5 million in seed funding. Next Coast Ventures led the round and was joined by investors including Meridian Street Capital. 

- SVT Robotics, a Norfolk, Va.-based provider of software for the deployment of industrial robotics, raised $3.5 million in seed funding. Cowboy Ventures led the round, and was joined by investors including Dynamo Ventures, Schematic Ventures, Ludlow Ventures, and NRV.

- Sleuth, a delivery deployment tracker, raised $3 million in seed funding. ​CRV  led the round, and was joined by investors from New Relic, Atlassian and LaunchDarkly. Read more.

- Scoota, a London-based maker of automated omni-channel digital branding, raised £2 million ($2.5 million) in funding. Notion Capital, the Angel CoFund, and VentureFounders.

- Every Mother, a New York-based fitness program for pre and post-natal women, raised $1.5 million in seed funding. Courtside Ventures led the round, and was joined by investors including Serena Williams’ Serena Ventures and Techstars Ventures.

- Magic Leap, the is in talks to raise additional funding, per the Information. The company has reportedly signed a term sheet with a “major health care” company. Read more.

PRIVATE EQUITY

- Adare Pharmaceuticals, backed by TPG Capital, acquired Orbis Biosciences,  a Lenexa, Ks.-based pharmaceutical tech company. Financial terms weren't disclosed.

- Brook and Whittle Holdings, a portfolio company of Snow Phipps Group, acquired Croydon, a Croydon, Penn.-based maker of shrink sleeve labels formerly known as Gilbreth Packaging. Financial terms weren't disclosed.

- CVC Capital Partners and Blackstone Group are in separate talks about investments in Italy’s Serie A soccer league, the Financial Times reports. CVC is in talks to buy a 20% stake in the league for 2 billion euros ($2.17 billion), valuing the league at 10 billion euros. Read more.

- Colony Capital (NYSE: CLNY) recapped Beanfield Metroconnect, a Canadian telecommunications infrastructure provider. The recap includes C$255 million ($181 million) of financing.

- Community Medical Services, a portfolio company of Clearview Capital, acquired Restorative Health and Recovery, a Kent, Oh.-based office-based opioid treatment provider. Financial terms weren't disclosed.

- RLG Capital and Trinity Private Equity Group invested $38 million eLearning Brothers, an American Fork, Ut.-based learning solutions company. 

- Sovos, backed by Hg, acquired Taxweb, a Brazil-based provider of tax determination software for enterprises. Financial terms weren't disclosed.

OTHERS

- Cognizant (NASDAQ:CTSH) agreed to acquire Collaborative Solutions, a Reston, Va.-based consultancy specializing in Workday enterprise cloud applications for finance and human resources management. Financial terms weren't disclosed.

- Franklin Templeton acquired AdvisorEngine, a digital wealth platform for advisors. Financial terms weren't disclosed.

PEOPLE

- HOF Capital hired Tala Al Jabri as a Partner. She was formerly at the SoftBank Vision Fund.