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The fintech CEO debunking IPO "obsession" quintupled stock units given to staff

As fintech funding dries up and opportunities to cash out stock payments grow fewer and further between, joining a publicly traded fintech, or one on the verge of an IPO, is an even more attractive prospect than ever. But one London fintech CEO says going public isn't all it's cracked up to be.

Speaking at the Innovate Finance Global Summit yesterday, Zopa CEO Jaidev Janardana said that all the talk about fundraising and IPOs is often just self-serving PR. 

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"The easiest way to get a story in the media is to say 'I raised this much money'" Janardana said. Private valuations look flashy, but "are ultimately what one investor thinks about a company." He notes that today, with funding rounds fewer and further between, IPOs are "the next big obsession."

The FT says Zopa is ready to float and that it wants to do so in the UK. However, Janardana said he'd be "surprised" if there were fintech IPOs in the UK this year.

Joining fintechs flaunting IPOs and valuations, can be risky; Janardana appreciates CEOs that focus on profitability and employees might want to as well. Zopa's annual report showed a swing to £15.8m in the black this week, which Janardana pinned on "strong unit economics," an attitude echoed by fellow profitable fintech OakNorth.

Staff might also want to focus on straight salary and bonus compensation. Zopa's recently released annual report revealed that it hired almost 100 employees last year, and paid staff average 'salaries and wages' of £74k. This is slightly down from £81.8k the year before, which is likely due to the fact that the majority of additions were administrative staff.

Zopa employees are also getting a lot more stock, with a catch. Zopa granted around 2.7 million stock options to employees at the start of the year, almost five times as many as were issued in the entirety of 2022. On average, the units were valued at £1.43, higher than the units in 2023, but less than half the value of stock units in 2022.

Employees don't seem to mind too much, however; Glassdoor reviews at Zopa average 3.95 stars in 2024 (though this is down from its all-time average of 4.4 stars). Recent reviews praise the culture and quality of people, but some criticise the working hours and note a lack of structure.

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Photo by Sarah Agnew on Unsplash

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AUTHORAlex McMurray Editor

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