Shank added: “Today’s decision was about about making the best choice for the company in the long term. This agonizing decision is also the right decision.”

When asked to elaborate on the reason, a company spokesperson said HotelTonight is “on strong financial footing,” but the layoffs were done to “realign the business against its goals.” The company says bookings were growing by 100% annually, but would not say how many bookings or users HotelTonight has.

HotelTonight has raised more than $80 million in venture funding — most recently a “Series D-II” led by Barry Sternlicht, CEO of Starwood Capital Group, in January 2014. Other investors include Accel, Battery Ventures, Coatue Management, GGV Capital, First Round Capital, Forerunner Ventures and U.S. Venture Partners.

The company launched in 2011 to make it easy for travelers to book last-minute hotel rooms. Last month, it told travel industry publication Tnooz that a new feature offering discounts based on geolocation had increased conversions with prospective customers. HotelTonight has competition from Google (GOOG), which launched an instant booking service this year, and TripAdvisor (TRIP), which also has an instant booking product.

In the U.S., HotelTonight has been consistently in App Store’s top 20 travel apps for the last year, according to app ranking site App Annie. That’s respectable, but puts it behind apps from online hotel booking giants like Expedia, Hotels.com, Booking.com, TripAdvisor and Kayak.

Below is Shank’s full statement:

Today my leadership team and I made a decision to reduce our staff by 20% – 37 people. Decisions like this one are never easy, but they are necessary. At a startup especially, it’s critical that we have the right people in the right roles in order to stay on track, and hit our growth and revenue targets. But this is also a decision that affects people’s lives, and we’re painfully aware of that.

Compounding the difficulty of this decision is that we’ve built an amazing company culture here. We like each other and we spend time together, which made today’s move especially difficult. The people who left today made amazing contributions to our success, and we’ll miss them. We’ve made plans to ensure they have as easy a transition as possible, including a generous exit package that will pay them through the end of the year.

This decision was hard, but it was also necessary: HotelTonight is now a more streamlined and focused company. We’re well-equipped to accomplish our mission to help people live a more spontaneous life. The business is doing very well: We grew over 100% in booking volume this year.

Word of mouth drives the majority of this growth, which tells me we’re achieving our goal to give people a fantastic experience. We’re on track to reach profitability next year. We’ll continue innovating and providing value to our customers and hotel partners.

Today’s decision was about about making the best choice for the company in the long term. This agonizing decision is also the right decision. We thank everyone at HotelTonight for your contributions, which have been invaluable, and wish you the very best.