Fast-growing CRE financing startup Lev cut around 30 jobs last week — which its chief executive said represented less than 30 percent of its workforce — as layoffs rip through the real estate and tech sectors.
The company, which in May raised a $70 million Series B funding round, made the layoffs on the sales and operations teams, CEO Yaakov Zar confirmed to The Real Deal.
“We did some rightsizing last week, following the path of most tech and CRE companies in this market,” Zar wrote in a text.
The CEO said Lev over-hired in anticipation of stronger growth in 2023, which he said now seems unlikely. Zar added that the company is still hiring for several key positions.
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Zar founded Lev in 2019 as a financing platform that uses artificial intelligence and automation to help borrowers source financing from a digital marketplace with some 5,000 lenders. The company earlier this year said nearly $1 billion in loans were originated on the platform in 2021 — a tenfold increase from the previous year.
Lev’s Series B funding round was led by Parker89 and Cross River Digital Ventures and brought its total equity funding to $110 million. Sources told TRD the funding valued the company at around $400 million.
Along with the equity, Lev landed $100 million in debt financing from Cross River’s Strategic Direct Lending Group, Commercial Observer reported.
Zar said commercial real estate was able to weather the rising interest rate environment better than the residential market earlier this year. But rising borrowing costs have slammed the brakes on CRE financing in the second half, and the slowdown is being felt throughout the industry.
Major CRE brokerages CBRE and JLL have announced layoffs as they cope with slowdowns in deal volumes.