Author: Charitarth Sindhu, Fractional Business & AI Workflow Consultant
We asked 10 industry leaders for the one lesson every private fintech should take seriously.
Two of the biggest fintech IPOs of 2025 have not gone to plan. Chime listed on the NASDAQ in June at $27 per share, peaked at $44.94 on opening day, and has since dropped to the low $20s. Meanwhile, Klarna hit the NYSE in September at $40 per share, popped to $45.82 on day one, and now trades around $14. As a result, that is a 65% collapse in under six months.
Together, these two companies have wiped out billions in market value. Specifically, Chime fell from a $25 billion private valuation to roughly $8.5 billion today. Similarly, Klarna went from $45.6 billion in 2021 to just over $5 billion. In short, the numbers tell a clear story: private market hype and public market reality are two very different things.
So what went wrong? And what should private fintechs learn from it before they consider their own IPOs? To find out, we put that question to founders, operators, and industry leaders across fintech, real estate, marketing, and technology. Their answers cut through the noise.
The hype-to-fundamentals gap
The core problem at both companies was the same. Growth looked impressive on paper, but the underlying economics were fragile. For instance, Chime posted $2.19 billion in 2025 revenue with 31% year-over-year growth. However, it also reported a $1.01 billion net loss, driven largely by stock-based compensation costs triggered by the IPO itself. Klarna told a similar story. It hit $1.08 billion in Q4 revenue alone, beating analyst expectations by a wide margin. Yet it swung from a $21 million profit in 2024 to a $273 million loss in 2025. In other words, the profitability story that sold investors on the IPO evaporated within months.
David Grossman, who runs growth at fintech platform Lessn, summed up the dynamic clearly.
“One big lesson from Chime’s and Klarna’s post-IPO struggles is that hype fades fast, but fundamentals don’t. In private markets, fintechs can be rewarded for rapid growth, big funding rounds, and ambitious expansion plans. Once you’re public, the conversation changes overnight. Investors focus much more on profitability, sustainable unit economics, credit risk, and how resilient the business really is. If growth has been fueled by heavy incentives, thin margins, or unclear paths to profit, the public markets tend to react quickly and often harshly.
Private fintechs should take this as a reminder to build strong foundations before chasing scale or headlines. That means having clear revenue models, disciplined cost structures, responsible risk management, and products that genuinely solve meaningful problems for customers. Sustainable growth built on real value will always outlast growth driven by momentum alone. Going public simply puts everything under a brighter spotlight, so the business needs to be solid long before that moment arrives.”
- David Grossman, Founder & Chief Growth Officer, Lessn
In fact, Grossman’s point about heavy incentives is backed by the data. Klarna’s credit loss provisions spiked 102% year-over-year in Q3 2025, a red flag that arrived just weeks after the IPO. Consequently, multiple class action lawsuits followed, alleging Klarna’s IPO documents misled investors about how much credit risk the company was carrying. On the other hand, Chime’s adjusted EBITDA margin sat at just 3% in Q2 2025, though it improved to 10% by Q4 as the company found its footing.
Dominic Guerra, who runs a real estate investment firm, drew a parallel that makes the lesson tangible.
“The lesson is simple: valuations built on momentum rather than fundamentals will always correct themselves. In real estate, I’ve seen sellers overprice homes based on peak market excitement, only to watch them sit unsold until the price reflects reality. Fintechs chasing IPO windows without locking in predictable, repeatable revenue streams are making the same mistake. Public markets are brutally honest in ways that private funding rounds simply aren’t.”
- Dominic Guerra, Founder, Cash For Homes Now
Private capital hides what public markets expose
One theme came up again and again in these conversations: venture capital funding can mask problems that public investors will punish immediately. In private rounds, for example, growth is the primary metric. As a result, revenue multiples climb and valuations balloon. Nobody asks hard questions about unit economics or loss rates because the next funding round is always around the corner.
Then the IPO happens, and suddenly every quarter gets scrutinised. Klarna is the textbook example. Its $21 million profit in 2024 was partly rescued by a one-time $520 million gain from selling its Klarna Checkout business. However, strip that out, and the company posted an operating loss of $121 million. In other words, the “path to profitability” narrative was always thinner than it appeared.
Hasan Can Soygök, who bootstrapped fintech platform Remotify to over 10,000 freelancers without venture funding, offered a founder’s perspective on why this matters.
“The biggest lesson is simple: venture capital lets you delay the question of whether your business works. When you’re bootstrapped like we are at Remotify, you find out fast. Every feature has to pay for itself. Every market you enter has to generate revenue that covers the cost of being there. Chime and Klarna had billions in funding and years of runway to grow without answering that question. The moment they went public, the answer was due. Private fintechs should stop treating profitability as something you figure out later. Build the economics first. The growth will follow, and it will be the kind of growth that survives contact with public investors.”
- Hasan Can Soygök, Founder, Remotify
Joe Rojas, who buys distressed properties in Memphis, also framed it through the lens of product readiness.
“The lesson is that timing your public debut around investor enthusiasm rather than business readiness is a recipe for pain. In real estate, I’ve watched developers rush to sell properties before completing renovations because the market was hot, and they always regret it when buyers discover the cracks. Private fintechs need to treat an IPO like a finished product, not a fundraising tool, because public market investors are far less forgiving than the venture capital money that got them there.”
- Joe Rojas, Founder, Blues City Homebuyers
Likewise, Parker Morris, who moved from Rocket Mortgage into real estate investing, reinforced the same point from personal experience.
“I’d say the biggest takeaway is that market hype can’t mask weak fundamentals forever. Investors eventually demand real earnings. When I transitioned from Rocket Mortgage to flipping homes with my brother, I learned that sustainable cash flow beats flashy growth metrics every single time. Private fintechs need to stress-test their business models for profitability before going public, because once you’re under the scrutiny of public markets, there’s nowhere to hide if your numbers don’t add up.”
- Parker Morris, Owner, Speedy Sale Home Buyers
The operational playbook: what IPO-ready looks like
Beyond the financials, several respondents pointed to operational discipline as the missing ingredient. For instance, Chime’s migration to ChimeCore, its proprietary transaction processor, cut processing costs by roughly 60% and helped push gross margins toward 90%. That kind of infrastructure investment is what separates a company that can survive public market scrutiny from one that cannot.
In contrast, Klarna took a different approach, leaning heavily on AI to cut costs. The company claims its AI customer service agent handles the workload of 853 employees, and it also reduced its headcount from 5,000 to around 3,500. As a result, revenue per employee jumped to $1.24 million, more than triple its 2022 figure. However, the cost savings were not enough to offset ballooning credit losses from aggressive U.S. expansion, particularly through partnerships like DoorDash that extended buy-now-pay-later financing to fast food orders.
Igor Golovko, a developer and founder at TwinCore, argued that the real work of IPO readiness happens in the data infrastructure, not the pitch deck.
“One lesson is that public markets punish ‘story-driven’ growth when unit economics and risk controls aren’t clearly proven quarter after quarter. Private fintechs should treat IPO readiness as an engineering and operating discipline: build auditable metrics (cohort retention, contribution margin, loss rates, funding mix), mature compliance and fraud controls, and make sure the product can sustain growth without incentives that quietly erode margins.
On the tech side, that means investing early in clean data pipelines and governance so those metrics are reliable under scrutiny. In practice we’ve seen this translate into tightening event tracking, reconciling ledgers in SQL, and enforcing repeatable reporting via CI/CD (e.g., TeamCity) so finance, risk, and product are all looking at the same numbers before the market does.”
- Igor Golovko, Developer & Founder, TwinCore
Furthermore, Abhishek Pareek, who leads a global development firm, took that idea further. He argued that engineering discipline is not just operational hygiene. In fact, it is a financial strategy.
“Fintech leaders like Klarna and Chime are a glaring example of how ultimately the value of a company is based on the strength of that company’s margins; it is not based only on numbers of users. A problem that many private fintechs face is that they over-engineer their product for growth and scalability before they have the user base to utilise that scale, leading to very large capital drains.
Venture rounds can hide poor unit economic efficiency for a period of time; however, when the shares are traded publicly, the investing public will factor those inefficiencies out to see if there is any cash being generated within the core business.
The most valuable takeaway here is that engineering discipline can be viewed as a financial strategy. The majority of private companies burn through their runway while building out complex and expensive architectures that cannot be maintained in proportion to their revenue stream. The fintechs that are successful in completing their IPO treat the technology stack as a long-term financial asset and ensure that every development sprint adds value with respect to building a path to profitability rather than simply an extension of feature bloat.
To be successful in going public you need to fundamentally alter the way that you think about operational burn. You need to shift your mindset from ‘What can we build’ to ‘What do we need to build in order to remain profitable.’ Making that transition may be painful, but it is the only way to eliminate the potential for your stock to become a ‘cautionary tale’ moment once it begins trading publicly.”
- Abhishek Pareek, Founder & Director, Coders.dev
Growth without profit is just an expensive story
Callum Gracie, who runs an SEO agency and sees firsthand how companies chase vanity metrics over substance, also connected the fintech IPO problem to a pattern he sees across industries.
“I see the same pattern in digital marketing that Chime and Klarna ran into with their IPOs. Companies pour money into growth metrics that look impressive on a dashboard but fall apart under scrutiny. User acquisition numbers, app downloads, brand awareness scores. None of it matters if the underlying business loses money on every transaction. At Otto Media, we tell clients that traffic without conversion is just an expense. For fintechs, users without unit economics is the same thing. Klarna had 118 million active consumers and still posted a $273 million loss in 2025. That should terrify any private fintech that measures success by how fast its user base is growing instead of how much each user is worth.”
- Callum Gracie, Founder, Gia AI
Similarly, Logan Benjamin, who co-founded a restoration franchise, saw parallels in the challenge of scaling without losing operational control.
“One key lesson from Chime’s and Klarna’s post-IPO struggles is the importance of sustainable growth over rapid scaling. Both companies faced challenges due to the pressure of meeting high investor expectations while navigating a volatile market. At PuroClean, we’ve seen how important it is to focus on building a solid, long-term foundation before scaling quickly. For fintechs, this means balancing innovation with operational stability, ensuring they can weather market fluctuations without compromising service quality or customer trust.”
- Logan Benjamin, Co-Founder, PuroClean
Additionally, Michael Kazula, a marketing director in the affiliate space, noted that the lesson extends beyond the IPO itself.
“Chime and Klarna’s post-IPO difficulties emphasise the need for fintechs to prioritise sustainable growth over hypergrowth. While aggressive user acquisition can initially attract funding, the crucial phase after going public requires a focus on long-term profitability, customer retention, and a reliable business model. This lesson is particularly important for fintechs that depend heavily on affiliate marketing strategies.”
- Michael Kazula, Director of Marketing, Olavivo
The bottom line
Of the 16 fintech companies that went public in 2025, only two traded above their IPO price by year end. Chime and Klarna were supposed to be the success stories that reopened the IPO window for the rest of the sector. Instead, they became cautionary tales.
Ultimately, the lesson is not that fintechs should avoid going public. Rather, it is that going public does not fix a broken business model. It exposes one. Because of this, private fintechs still in the pipeline, including Stripe, Revolut, and Ramp, should study these outcomes carefully. After all, the market is no longer asking how fast you are growing. It is asking whether you can sustain profitability through a credit cycle, a regulatory shift, and a competitive disruption, all at the same time.
Every expert we spoke with arrived at the same conclusion through different paths: build the fundamentals first. The IPO is not the finish line. It is the starting gun for a much harder race.