Zume, a robotics start-up backed by SoftBank, will cut 360 jobs, or about 50 per cent of its workforce. In addition, the company will close its robot pizza delivery business, focusing on food packaging. For SoftBank’s Vision Fund, this is another setback.
Over the past year, several companies in which the fund has invested have announced layoffs and changes in executives. Earlier this week, SoftBank-backed car rental company Getround cut about 150 jobs, or about a quarter of its workforce. It comes after some of SoftBank’s biggest and most high-profile companies, such as Uber, the online car company, and WeWork, which canceled its IPO plans last year, were also disappointing when they went public.
SoftBank invested $375 million in Zume in 2018, when the start-up was valued at $1 billion. Zume’s valuation was just $218m, with a total fund-raising of $71m, according to Pitchbook, a US start-up analytics firm. Like other start-ups supported by SoftBank, Zume uses the money to quickly expand and expand staff. But over the past year, investors have shifted their focus from “growth at all costs” to clearer earnings prospects.
Alex Garden, Zume’s founder and CEO, said it had been a difficult day for the start-up, but the changes would allow it to focus on “inventions that are showing strong business appeal”. Mr Gaden said the company would create 100 jobs in the Source Packaging unit, where laid-off workers could apply. Pizza Hut has been trialling Zume’s round box packaging in a limited number of ways, which it says are made from sustainably harvested, industrial compost-enabled plant fibers. Zume says the packaging has been patented several years ago.
As for Mr Garden’s relationship with SoftBank, he said: “Any sarcastic rhetoric is incorrect and we are constantly having constructive discussions with it.” SoftBank and other investors in Zume support the reform, he said.
Mr Garden said he was inspired by his first meeting with Sun Justice, the CEO of SoftBank and founder of SoftBank’s Vision Fund. “He’s a man with only one goal in mind, and that’s to improve people’s quality of life. Gaden said. “This fits very well with Zume’s vision. “