Tonik lays off employees, hits profitability for lending products

Tonik Digital Bank founder and CEO Greg Krasnov / Photo credit: Tonik Digital Bank

Singapore-based Tonik Financial, which operates Tonik Digital Bank in the Philippines, has laid off a number of its employees as it seeks to boost revenue and achieve profitability.

The company retrenched “a few fixed positions that are not essential to supporting the company’s objectives going forward,” founder and CEO Greg Krasnov told Tech in Asia via an email.

While the exec did not disclose how many were laid off, a source with direct knowledge of the matter told Tech in Asia that there were 80 positions affected across units.

In his statement, Krasnov added that the company’s lending products have hit unit profitability and that the firm is now aiming for group profitability.

This comes after Tonik increased both its consolidated loan portfolio and headcount in 2023, rising 201% and 45%, respectively, according to Krasnov. It also reduced its net cash burn by 33% last year, he added, without disclosing actual figures.

In 2022, the company had total comprehensive losses of US$37.6 million, with wages and salaries expenses reaching US$10.6 million, according to Alternatives.pe, which tracks regulatory filings. Meanwhile, net interest income grew 5.7x from 2021.

Krasnov said that Tonik intends to “redeploy resources into direct support” of its growth, expecting further improvements in its loan portfolio and revenue. The company hopes this will drive “a double-digit growth in overall headcount before year-end,” he added.

Launched in 2021, Tonik Financial increased its headcount to nearly 600 by January 2023.

“Risk is part of our daily business,” Krasnov told Tech in Asia at the time. “We need to assess where we can allocate our resources so we minimize the risk and optimize profitability.”

See also: Tonik CEO on BNPL: ‘I prefer to call it sales finance’