Cake Group lets go staff amid revenue decline, denies cost-cutting

Bake, a crypto investment platform based in Singapore, has cut at least 34 employees since January, the company confirmed.

However, former staff tell Tech in Asia that the number of workers fired over the past year is closer to 60 and the platform is currently losing up to S$1 million (US$733,000) a month.

Cake Group co-founders Julian Hosp (left) and U-Zyn Chua / Photo credit: Cake Group

While Bake did not comment when asked to confirm this figure, CEO Julian Hosp told Tech in Asia in November last year that the company had a runway of five to eight years at the time.

Bake, the retail arm of Cake Group, changed its name from Cake DeFi in June.

Massive growth in 2021

Like many decentralized finance (DeFi) platforms, Cake Group’s business boomed in 2021. The company, which earns fees on the transactions it makes on its clients behalf, released an unaudited financial statement that showed revenue reaching US$631 million in 2021, a year-on-year increase of over 1,800%.

Operating income hit US$203 million for the year and the platform finished 2021 with US$133 million in its treasury. That comprised US$2.2 million in cash, US$83.4 million in stablecoins, and US$47.6 million in other digital assets.

But after a crash in crypto prices in May 2022 followed by the prolonged crypto winter, Hosp told Tech in Asia that he expected growth to slow significantly.

Cake Group’s revenue fell to US$266 million in 2022, according to its audited financial statement. Profit dropped to US$23.5 million from US$134 million in 2021.

Bake finished the year with US$36.5 million in cash and cash equivalents, US$47 million in stablecoins, and US$70.6 million in digital assets.

Digital assets due to users – the amount investors gave to Bake to invest on their behalf – fell from US$678 million in 2021 to US$184 million in 2022.

Finding its footing in the crypto winter

Tech in Asia spoke to four former Bake employees under the condition of anonymity, who say the company is now struggling to reverse a drop in traffic to its website.

According to one employee, a decision was made in December 2022 that major changes would be necessary if the situation did not improve by the end of the second quarter of this year.

The layoffs this year include 18 remote employees and 16 staff members from its Singapore office. Former employees told Tech in Asia that their termination dates ranged from November 2022 to June 2023.

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