Hitting the $1bn valuation mark can play a role in helping fintechs attract the best talent.
Reaching a valuation of $1bn or more, or becoming a ‘unicorn’, has become such a common occurrence that companies are now shifting their ambition towards either becoming a ‘decacorn’ ($10bn valuation) or going public.
For companies which have long reached the decacorn status, such as digital platform Grab, the next source of market speculation has become when they will list. Earlier this year, for example, SoftBank Vision Fund-backed Grab announced plans to list on Nasdaq through a merger with Altimeter Growth, a special-purpose acquisition company, though this initial public offering (IPO) has now been pushed back.
While hitting a $1bn valuation is a huge step for a start-up, it is no longer enough to make headlines in the shadow of these companies. But are column inches the intended goal of many of these companies? While achieving publicity is not a bad thing in itself, for a fintech company providing niche business-to-business payment services becoming a household name will not necessarily help it in reaching its core market. Indeed, a company that has reached the $1bn milestone is likely to be widely known and used, at least in its home market.
However, for many of these fintechs reaching unicorn status gives them the chance to shake off the start-up label once and for all — whether that takes a couple of years or a decade to achieve. And leaving behind the start-up tag gives the company a perception of strength and permanency, which is needed to convince the best talent to sign up. When start-ups are scaling up, experienced and talented individuals are more likely to be wary of taking a risk on a company without a proven track record. Having proof of investor trust and a roadmap for further growth provides the reassurance of job security needed by many prospective employees.
Being lauded with unicorn status not only means a cash injection for these fintechs, but the chance to draw in the talent needed to help them reach their goals. And it is having this talent which will allow more companies to follow the paths of Grab into the decacorn and IPO space.
