As layoffs slow and churn improves, is startup health improving?

As layoffs slow and churn improves, is startup health improving?

Startup health appears to be recovering in the United States, new data shows.

According to several metrics TechCrunch has tracked throughout the COVID-19 era, the fortunes of some startups appear to have bounced off lows set in March and April. Data concerning layoffs, and, more specifically, software revenue and customer losses indicate that many firms have stopped making aggressive staffing cuts and are shedding fewer customers than earlier in the pandemic.

These two signals don’t sum up the entire startup market. But while TechCrunch has spent time in recent days parsing surveyed sentiment and reported observations from founders and private-market investors alike, studying layoffs and churn should help sharpen some of the blurred edges in our view of the current landscape.

The Exchange is a daily look at startups and the private markets for Extra Crunch subscribers; use code EXCHANGE to get full access and take 25% off your subscription.

This morning let’s explore trends in software sales via ProfitWell, a startup focused on SaaS retention, and new data from, a startup layoff tracker built by the co-founder of Human Interest. Both groups provided TechCrunch with freshly charted data to parse.

After we dig through the new information, we’ll check in with Bessemer growth-stage investor Elliott Robinson to compare our findings with what he’s seeing in the later stages of the venture market.

Startup health

Health amongst growth-oriented private firms varies greatly from company to company, often hinging on sector served; for example, upstart software companies that sell to the travel industry may still need to layoff staff despite improving performance amongst their general business model cohort.

And not all startups sell software, even though the Software as a Service model has become one of the most popular for high-growth private companies approaching the market. This means any single perspective on a startup group, or all startups, will necessarily miss nuance. But a general picture is better than no perspective at all, so we’ll proceed all the same; let’s begin with layoffs.

Staffing cuts in sharp decline has become an important hub for startup news in the COVID-19 era, counting up layoffs from startups around the world and noting unconfirmed reports as well, which helps workers keep tabs on their company and industry. (Notably, the same group recently put together a similar site that explores startup severance.)

Via, observe how far startup layoff activity has fallen in recent weeks, a trend TechCrunch noted earlier in June:

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