TECHNOLOGY
Attracting investors in reluctant climate Proof of clear strategy and sound economics are two essential ways that fintechs can improve their chances of attracting investment – despite the economic downturn .
Angel investor Patrick Kavanagh , who ’ s also the co-founder of Atlantic Money and one of the first capitalists that backed the investment platform Robinhood , says that the situation is very difficult – but fintechs can help themselves .
“ While valuations thrived during the COVID-19 crisis , the era of subsidising unsustainable growth seems to be in the rear-view mirror now . Fintechs are now quite literally paying for their previous stratospheric valuations , rapid expansions and loss of focus . They ’ ve been forced to tighten their belts , with many withdrawing job offers and laying off staff . Lay-off tracker TrueUp estimates there have been over 100,000 tech layoffs in the past five months .”
He continues : “ In this risky environment , fintechs need to refocus and consider what will convince investors to loosen the purse strings . They want to see more proof that core economics make sense and business models that are easy to understand . Crucially , investors want to see a clear path to profitability . Companies that also focus
“WHILE VALUATIONS THRIVED DURING THE COVID-19 CRISIS , THE ERA OF SUBSIDISING UNSUSTAINABLE GROWTH SEEMS TO BE IN THE REAR-VIEW MIRROR NOW ”
PATRICK KAVANAGH CO-FOUNDER , ATLANTIC MONEY
on customer segmentation and build targeted products to match will likely be rewarded for their efforts .”
Leadership and resilience in fintech A change of direction , as advised by Kavanagh , requires executive teams and company leaders to reevaluate their strategies , and change direction . This may
“ WITH ALL STARTUPS , FLEXIBILITY AND PATIENCE ARE KEY ”