Heidi cuts 18% of staff as founders exit after $475 million raise

Melbourne AI health unicorn Heidi is cutting about 18% of its global workforce just six weeks after a $475 million funding package, according to Startup Daily.

The cuts coincide with the departures of two of Heidi’s three co-founders, Waleed Mussa and Yu Liu. Co-founder and CEO Dr Thomas Kelly disclosed the reorganization to staff on Wednesday, after the company held an all-hands meeting.

Heidi did not say how many employees are leaving from each function or where reductions will occur. With more than 600 staff, the company’s estimate means at least 108 roles will go.

Startup Daily reported the action on the same day Canva announced a separate restructuring affecting 22% of its workforce, around 1,270 staff. The announcements put two workforce resets in public view at once, but Heidi’s plan also moves customer support into product, consolidates research and development, and changes ownership for new businesses.

According to Startup Daily, Heidi raised US$100 million (AU$140 million) in a Series C in September, led by Blackbird at an AU$1.26 billion valuation. Less than a fortnight before that financing, the Startup Daily awards named Heidi Scaleup of the Year and AI Gamechanger.

General Catalyst’s Customer Value Fund led a separate US$240 million (AU$335 million) growth investment, structured as a debt facility for customer acquisition. The two transactions account for the package’s AU$475 million total, combining a Series C with customer-acquisition debt. For capital providers, the distinction is structural: the Series C raised US$100 million, while the General Catalyst facility explicitly uses debt for customer acquisition.

Kelly said on LinkedIn: “In the last few weeks, we reflected carefully on how we’re structured, and we weren’t putting our investment into the right teams and markets to make the most of our continuing growth.” He added: “It’s painful, but it’s what we need to do now to continue growing quickly and deliver on our plans for next year.”

Kelly told employees that Heidi was restructuring despite rapid growth. The changes followed a detailed review of the company’s priorities and where to direct people and investment.

According to Kelly, the new structure brings more customer support into the product function. It also consolidates R&D around one roadmap and gives each new product business clearer ownership and a dedicated team.

Heidi said it continues investing in products, markets and its team while supporting three million patient interactions every week. At that reported pace, the company handles roughly 156 million interactions a year. The scale makes Kelly’s shift of support into product a direct operating change for customers, not merely an internal reporting adjustment.

What does this restructuring change for customers and staff?

For customers, the immediate change is organizational. The plan Kelly described moves support inside product, aligns R&D around one roadmap, and gives each new product business a dedicated team and clearer ownership.

For staff, the immediate change is a smaller global workforce, with at least 108 roles ending and no breakdown by function or location yet published. Kelly said affected employees will receive severance and benefits packages exceeding statutory requirements in every country.

Heidi plans to outline its new structure and priorities the following week. It will then hold meetings for individual functions and regions.

A founder transition with defined handovers

Startup Daily reported that Mussa and Liu are leaving for different reasons, and Kelly called the announcement sad news. He said it would be hard for everyone at Heidi to continue without the founders who helped build the business from its early days as Oscer.

Mussa is taking time with his family after Kelly described a period of many late nights and weeks away. He will stay for the next couple of weeks to finish outstanding work from the fundraise and hand over partnerships.

Liu will move into an advisory role focused on models and hardware through the end of March 2027. His co-founder departure therefore includes a defined advisory period, unlike Mussa’s temporary handover.

Kelly traced his partnership with Mussa to 2015, when Mussa hired him at medical entrance exam preparation business Fraser’s GAMSAT. Mussa backed Oscer within Fraser’s in 2019, and Heidi grew from those early days.

After Wednesday’s all-hands, Kelly apologized to departing employees in a note and accepted responsibility for the decisions on the leadership team’s behalf. He said employees had given Heidi their talent, time and belief.

The next checkpoint for customers, employees and capital providers comes next week, when Heidi is due to publish its new structure and priorities. Kelly’s plan links that reset to three million weekly patient interactions, two co-founder departures and funding that combines a Series C with customer-acquisition debt. Execution will show whether the reorganized teams can protect service and deliver next year’s growth plans after the leadership shake-up.