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When a start-up shuts down before it has started

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I was intrigued by the news of Glorifi, an anti-woke FinTech start-up that closed before it had really opened.

The company, which missed multiple launch deadlines and had its CEO step down due to misconduct, is citing “reputational attacks” and “the failing economy”

Rolling Stone, November 2022

The firm was pro-Republican, pro-America, pro-freedom and pro-capitalism, but shut down three months after launch … because it couldn’t find any further funding.

We talked about this on this week’s FU, but it goes deeper than this. For example, three co-founders of FinTech lending start-up Pipe, valued at $2 billion in a funding round in 2021, are stepping down. Why? Inexperience.

The three founders are co-CEO Harry Hurst, 33 years old; co-CEO Josh Mangel, 29 years old; and CTO Zain Allarakhia, 34 years old. On departing, Harry Hurst said in a press release:

“While the three of us will still all be involved in Pipe, of course, we acknowledge the company needs a veteran and experienced operational CEO to drive the business forward to even greater heights.”

This is a three year old FinTech, not a three-month old but, in both cases, there is a sign.

What sign?

Well, after the exuberance of the 2010s, the recognition of reality in the 2020s. A little like the crypto meltdown, the light is now shining strong on experience versus vision. I’ve said for a long time that FinTech is the partnership of technology innovation combined with financial experience. I call it the parent-child relationship in finance. You need challengers and veterans.

Come the recession, come the reality.

What we are seeing today is a massive shakeout of the market as funding dries up, and the bubble and froth becomes beans on toast.

Like so many others, I’ve enjoyed the last decade of fun. Funds were free-flowing; people were making millions in cryptocurrency; billion dollar unicorns were being born in days; and everyone felt that the old state system and banks were dead. Now, thanks to a pandemic, a war and a global recession, many are recognising that funds have disappeared; the crypto winter is here; the unicorns were actually just that, as in a fictional creature; and the old state system and banks are very much alive and kicking.

Banks have made more in the past year than in the past decade, in some cases, and the squeeze on credit and lending will make them a lot more in the next decade.

Meanwhile, the young visionaries of the FinTech world – the children – are finding that the fun and easy money has dried up. Many have never been through a recession, and this one is the biggest since whenever.

On my own reflections, I cannot remember a time when there wasn’t a recession. Growing up in the UK, we had record interest rates in the 1980s; a massive run on sterling in the 1990s as we left the Eurozone plans; a huge bank collapse in the 2000s due to the global financial crisis; a sovereign debt crisis and #Brexit hangover in the 2010s; and now a massive global recession due to the war in Ukraine on the back of global pandemic.

Therefore, for all the mentoring and support I give to the FinTech community, it’s time for a bit of reality. You have to be fit. That’s not just fit for purpose, but fit for the future. You need the cash runway to survive the bloodbath we’re going through.

Some are fit, but many are not. Expect to see more Glorifi’s and Pipe’s.

Source: The Financial Times



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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...

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