“For our business, Mother’s Day, one of our biggest times of the year, we just didn’t see the same pop we had during COVID,” CEO Steven Galanis said. “We decided best move to get into cash-preservation mode. We think it would be very tough to raise capital anytime in the next 6 months, so the best thing is to take step back here.”
Cameo is the first high-profile Chicago startup to announce layoffs, but venture-backed companies in Silicon Valley already have been cutting back. It’s a sign that the white-hot funding market has cooled, and startups likely are headed for one of their periodic lean periods when money is hard to come by.
Galanis says Cameo still has plenty of funding from the $100 million raised early last year. It grew quickly during the pandemic, roughly tripling its staff.
“The way we were burning cash, it didn’t give us as much runways as I thought was optimal,” Galanis said. "Cameo is not done growing. We need to shore up our balance sheet right now to make sure we have everything we need in the long term. I’m excited about the intermediate and long-term prospects.”
Cameo attracted attention as a relatively rare consumer-facing technology company in Chicago that landed investment from high-profile investors, including Silicon Valley venture fund Kleiner Perkins and Softbank.
The company, founded in 2017, has been experimenting with additional revenue streams, adding video calls and merchandise options, as well as a business-to-business marketing option. Those businesses remain intact, but some planned new ventures are on hold. “It’s full steam ahead,” Galanis said.
Earlier this week, Snap and Cameo announced plans to create ads.