OakNorth CEO: unprofitable fintechs are hogging scarce talent
After a long drought, are fintechs brave enough to IPO once again? We’ve seen eCommerce giant Instacart do it, with other fintech unicorns like Thought Machine considering it. Many other fintechs are struggling for profitability, though, and one fintech CEO says the sheer number of them is an issue.
OakNorth Bank founder Rishi Khosla spoke this week at the 2023 Sifted Summit on the need for IPOs as a source of liquidity. “Investors invest because they want a return on their capital, ultimately,” Khosla says. We haven’t seen a market allowing them to do so “for the last several years in the UK.”
An unfortunate side effect of this ecosystem to Khosla is that “some VCs are supportive to the point they’re keeping businesses alive before they may be fundable enough to prove themselves.”
Khosla says this is a problem because “it doesn’t allow the recycling of talent,” particularly businesspeople. “There’s immense depth in this country of technical skills,” Khosla says, “but not business or management skills.”
Those scarce staff are vital to ensuring profitability and realizing liquidity potential. Leaving them in fintechs which will take forever to get there (or never get there at all) ultimately harms the industry.
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