Chris Skinner's blog

Shaping the future of finance

Unicorns and incumbents are equally challenged in this crisis

Chris Skinner Author Avatar

I’ve often questioned the valuations of unicorns in technology, whether it be Uber or Revolut.

And here we are in lockdown world and the valuations of most unicorns are crashing overnight. Monzo’s value is down 40 percent, and FinTech funding is at a three year low.

Some companies like Revolut were quite lucky. Raising $500 million in February, they are fairly well off and on the acquisition trail. However, many other firms were already starting to feel the pinch and, as the lockdown hit, are really feeling the hurt. Most expect one in four start-ups to fail during this lockdown and some even more, but who will fail and what will happen to them?

I firmly expect many FinTech failures, but none will be as spectacular as the illustration of the poster child start-up: WeWork. If you didn’t see it, WeWork backer SoftBank came out the other day and said their value was down by two-thirds in just one quarter. Here’s the headlines:

  • SoftBank founder and CEO Masayoshi Son said his investment in WeWork was “foolish.”
  • The comment comes as SoftBank gave WeWork a valuation of $2.9 billion as of March 31 based on a discounted cash flow method, down from $7.3 billion as of Dec. 31.
  • WeWork’s private valuation was as high as $47 billion before its botched IPO last year (you cannot make a direct comparison between this valuation and the one above, as the one above uses discounted cash flow accounting)

SoftBank Founder and CEO Masayoshi Son does sound a bit foolish after investing $18.5 billion in the company that now has a value of just an eighth of that investment. More than this, however, is the questions that the crisis has raised about the fundamentals of business. If we no longer need an office anymore, why would we need a WeWork? If we no longer need to go to retail stores anymore, why do we need a Square or an iZettle? If everything is now digital, why would we want a bank branch and a teller?

There are many core questions about the future world that we should be asking right now, but what I feel is a fundamental shift where the digital players – Alibaba, Stripe, Amazon and more – are flourishing. Equally, cloud providers are blossoming and getting decisions made to move to virtual structures almost overnight.

I was talking with one cloud provider the other day who told me that every bank who had been ‘considering’ their propositions hit the green light at the end of March. But tough, they weren’t a customer at the beginning of March. As a result, the customers who were already on their cloud platform gained priority and the queue of financial institutions, who had been prevaricating had to sit and wait for attention.

I love this picture. I love the fact that big companies with big budgets making big decisions had deferred those decisions for so long that when the big crunch came, they got the big cold shoulder.

And so, they should. Why didn’t they make these decisions back in the good times? I had another conversation where someone said to me: the bank had a backup plan for a crisis in their head office. It was another office.

These guys never had a backup plan for a physical meltdown. Their backup plan was based on the scenario of a terrorist attack on their head office. Hence, they rented out a second head office just in case.

Now, in the middle of a pandemic lockdown, they’re thinking hey, we need cloud. And the cloud guys are going hey, you need cloud but we told you that five years ago and you couldn’t decide. Tough.

This crisis really will sort out the good guys from the bad and, in that light, the unicorns who had unsustainable, over-valued, ridiculous models of doing business will see their wings clipped and horn cut, as will the incumbents who prevaricated, couldn’t make decisions and sat on the wall of physicality because they couldn’t face digitality.

About time.

Chris Skinner Author Avatar

Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog,, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...

Intelligent Money: Our Future Is Where We Do Not Think About Money, As Our Money Thinks For Us

What is the future?

Learn more

Learn more about Chris

About Chris Skinner

The Past, Present And Future Of Banking, Finance And Technology

Fintech expert Chris Skinner: countries need digital transformation to remain competitive

Join me on Linkedin

Follow Me on X!

Hire Chris Skinner for dinners, workshops and more

Learn directly from from one of the most influential people in technology, gain insights from the world's most innovative companies, and build a global network.

Chris’s latest book

Order now

Chris Skinner’s ‘Digital For Good’ Book Launch Event – CFTE

Top 50 Global Thought Leaders and Influencers on FinTech 2023

Chris Skinner
Commentator, CEO of The Finanser and best-selling author at The Finanser

Thinkers360 Thought Leader

Contact Me

Global Awards

Lifetime Achievement Award

Global 100 - 2024 Winner

Chris Skinner - Financial Markets Advisor of the Year - The Finanser - UK 2023

Best Financial Markets Advisor of the Year 2023

30 Best Regtech Blogs and Websites 2023

Kids creating the future bank | TEDxAthens

Captain Cake and the Candy Crew

Captain Cake Winner of a Golden Mom’s Choice Award


Alex at the Financial Services

Gaping Void's Hugh MacLeod worked with the Finanser