Financial Technology Startup Cadre Lays Off 25% Of Its Employees
Cadre, the closely watched real estate investment technology platform, is laying off 28 employees, about 25% of its workforce, as it moves to deal with the financial implications of the pandemic, according to two people familiar with the situation.
Commercial real estate transactions involving assets like offices and multi-family apartment buildings have completely frozen-up since the end of February, reducing Cadre’s revenues that partly rely on up-front transaction fees.
At the same time, Cadre is also moving to broaden its business by trying to launch a real estate investment fund that can take advantage of a distressed real estate environment.
Cadre, which declined to comment, joins a growing list of high-profile technology companies like Airbnb and Uber UBER that have laid off a large number of employees amid the pandemic. Cadre is planning on covering health insurance costs of laid off employees for the rest of 2020 and extending the post-termination exercise period for option grants to two years.
“The professional respect and personal friendships I have with our team make it gut wrenchingly difficult to share the news that we are reducing our head count by 25 percent,” Williams wrote in a post on Cadre’s web site. “While our current portfolio is holding up well thus far, we are navigating an environment in which real estate transactions have abruptly halted, and we can’t be certain how long this will last.”
Founded in 2014 by Ryan Williams, Cadre has built an online marketplace where qualified investors can buy and sell individual commercial real estate properties.
Prior to the coronavirus, Cadre was on a roll. Cadre’s platform finished 2019 overseeing $860 million of assets and closed $1 billion of transaction volume last year. Cadre CEO Williams, 31, started 2020 by hiring former Four Seasons CEO Allen Smith as president and was planning for Cadre’s first profitable year.
In addition, Jared Kushner, the son-in-law and senior advisor to President Donald Trump, divested his stake in Cadre earlier this year. Kushner had cofounded Cadre and the financial connection had persistently been a troublesome one for Williams and Cadre to manage amid conflict-of-interest accusations related to Cadre’s work in opportunity zones.
Based in Manhattan, Cadre has partnered with Goldman Sachs GSBD and secured a financial backstop from George Soros’s investment operation, in addition to receiving backing from the likes of Peter Thiel, Mark Cuban and Vinod Khosla.