Uptake Technologies, Inc., a data science startup, is shedding dozens of employees following an announcement that two backers of the company were withdrawing their investments into the company. These Uptake layoffs at 2018’s beginning are the first cuts ever made at the company, which launched in 2014. Co-founder and CEO Brad Keywell said that 51 employees would be shed from the company in a statement. These Chicago startup layoffs come as other companies in the area have also faced difficulty, especially in the fast-paced, high-stakes startup environment.
The Uptake job cuts will reduce the total number of workers at the company from around 800 to about 750.
Uptake operates as a software as a service (SaaS) provider, analyzing data from machinery. The company recently received a valuation of $2.0 billion, ranking it among the oft-used tech term “unicorn,” which refers to any startup that receives a valuation of over $1.0 billion.
“We move forward with an even more precise focus on building and deploying actionable insight products that create impact for global industry,” Brad Keywell said regarding these Uptake layoffs in 2018’s infancy. “This was a difficult, but necessary, decision to best serve the needs of Uptake and our customers.”
The company’s last Series D funding round of $117.0 million, led by Baillie Gifford and with additional funds coming from existing investors Revolution Growth and GreatPoint Ventures, put the company at a $2.3 billion post-money valuation. Uptake has raised a total of $263.0 million in funding.
The Uptake layoffs come as the company is seeking to branch out into a variety of industries, from agriculture to aviation to mining and energy.
Caterpillar Ended Its Investment in Uptake in November 2017
One of the biggest primers for the Uptake layoffs in 2018 was the withdrawal of Caterpillar Inc. (NYSE:CAT) from the investment pool. Though the company remains of customer, Caterpillar’s stake in Uptake has been dropped.
The Caterpillar investment loss hurt the startup, even while Caterpillar continues to use Uptake’s technology in order to make its equipment more efficient.
Uptake received another blow when Chicago private equity firm Valor Equity Partners similarly abandoned Uptake, three months after putting $35.0 million into the startup.
Outcome Health, Another Chicago-based Startup Laid off Employees in October 2017
The Uptake layoffs are not the only unicorn-based job cuts in the Chicago area. Another startup, Outcome Health, laid off an undisclosed number of employees. The Outcome Health layoffs were said to number in the dozens, however, marking a significant cut to the 600-employee workforce.
These cuts took place in October, just after Outcome Health had promised to create 2,000 jobs in Chicago over a period of five years.
No industry in America is immune from technological disruption—not even the traditional healthcare sector, which has long relied on humans to provide services. Take the example of the Outcome Health layoffs that occurred in the past week. We saw a healthcare technology company cutting jobs because of technology, resulting in healthcare layoffs.
Most of the job cuts at Outcome Health took pace in the company’s Chicago offices, although some were shed from New York as well.
Outcome Health is a healthcare technology company that received a valuation of $5.0 billion, making it among one of the strongest Chicago startups in that regard.
But the sky-high valuation was not enough to prevent more Chicago startup layoffs, as the company found itself reducing workers due to technological improvements from automation.
“This week, Outcome Health made the decision to part ways with some employees as part of Outcome Health’s broader effort to deliver greater value to our customers through operational excellence and accelerated investments in technology, automation, and process improvement,” the company wrote in a statement.
Outcome Health received a massive cash injection in 2017 by way of venture capitalists led by Goldman Sachs Group Inc (NYSE:GS). The company received $500.0 million in funding during that round.
“Brad Keywell’s Uptake lays off 51 employees,” Chicago Tribune, January 9, 2018.
“Unicorn startup Uptake Technologies laid off 51 employees after a $2 billion valuation,” TechStartups, January 9, 2018.
“Caterpillar ends its investment in Uptake,” WMBD WYZZ TV, November 15, 2017.