has fired 50 of its 180 employees, a 28% cut in its workforce.
It isn't that the company is running out of cash, says Tundo VP Business Development Hillik Nissani. The lay-offs were required because it's hard to raise more funding these days and the Voice over Internet Protocol is developing more slowly than expected, he explained. Hard decisions were required.
"We've learned some things in recent months," Nissani says. "First, the value of money has changed. The valuations of the past are gone. If we had to raise more money now, it would have probably been done at a much lower valuation than before."
He says that if the company would have gone on spending cash at the same pace, it would have to hold another placement sometime soon.
"In addition, we've discovered that the VoIP market isn't as close as as we'd first thought," Nissani added. "Communication equipment giant
(NYSE:NT) itself cancelled a project similar to ours, which is a telling indication that the market will take some time to develop... All in all, we receive great feedback on our products from customers and analysts, and we still have enough cash for many months of activity."
In addition to the lay-offs, Tundo has closed its European office, because that market is even further behind than the American market.
Tundo ended 2000 with sales of several million dollars. It hopes to increase its revenues in 2001 by several hundred percent.
To date Tundo has secured $37 million in financing. Its latest placement secured $30 million at a $120 million company valuation, post-money. Its shareholders include venture capital funds
and Magnum, an Israeli fund.