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Advanon set out to write start-up history with an innovative cash flow management tool. Four years later, the fintech is cutting jobs in a massive retreat, finews.com has learned.

The shock came the last weekend in June: Advanon's management team under CEO and co-founder Phil Locajono told the Zurich-based start-up's 34 employees he was letting them go. On Monday, 15 of the terminations were revoked by Advanon – but the events busted the myth of a burgeoning fintech.

The cuts, recounted to finews.com by several people familiar with the events, represent a radical move by the much-lauded fintech. Founded in 2014 by three former Google graduate staffers, Advanon had been in dire shape for several months by then: money was running out following an ambitious European growth plan launched in 2017.

Fraud Setback

One year ago, Advanon was hit by a fraud scheme which battered trust among its clients. The start-up beefed up hiring following the $2.4 million scare, especially of senior leadership as well as risk management – which caused a spike in spending.

The move also led to a clash of views: on one side, Advanon's early employees with a strong start-up mentality, and frequently on the other side, executives with extensive experience in traditional financial services seeking to better equip the fintech to go head-to-head with banks.

Hot Fintech, Staff Perks

Clients had clamored for Advanon's offering, which allows companies to secure financing against its outstanding invoices. The Swiss fintech clinched a partnership with Deutsche Bank, and was quickly vaunted as one of Europe's «20 hottest fintech start-ups» by a fintech blogger and «influencer».

In 2017, Lojacono co-founders Stijn Pieper and Philipp Kornmann clinched 13.5 million Swiss francs ($13.6 million) in financing. The start-up used some of that on so-called staff Advaperks, like massage vouchers, gym memberships, and month-long parenting sabbaticals, for hitting targets.

Prominent Backing

 The trio had also attracted high-profile backing from prominent investor Daniel Gutenberg's VI Partners, Partners Group co-founder Urs Wietlisbach, former private banker Eric Sarasin, and Moneypark founder Stefan Heitmann. Advanon was two years old when it decided to use the domestic market as a springboard to attack Europe.