Experts believe that CFOs are either joining larger start-ups or moving away from the start-up ecosystem to join legacy businesses.
Twelve Indian unicorns saw their chief financial officers (CFOs) resign this past year, while companies in this space added 15 CFOs, according to a report by executive search firm WalkWater Talent Advisors. According to Gibin Varghese, Partner (Technology Practice) at the firm, there are a variety of reasons for the resignations. “Most of the Unicorn CFOs who have resigned in the last one year have done so for reasons such as – joining another global or larger start-up, starting on their own or joining the traditional sector,” he told Business Today.
The study also highlighted the dismal numbers when it comes to gender diversity. According to the report, only four per cent of Indian CFOs are women. This is well below the US number, which stands at 17 per cent.
Furthermore, the maximum number of CFOs resides in the National Capital Region, followed by Bengaluru, Mumbai, and Pune.
BT reported earlier that the last few months have witnessed Indian start-ups carrying out a frantic search for CFOs. These include both the small ones as well as the ecosystem’s biggies. In January, fintech major BharatPe hired former SBI Card CFO Nalin Negi. Surprisingly, the fintech unicorn had functioned without an officially-appointed CFO since its inception in 2018. It had appointed professional services firm Alvarez & Marsal as the interim CFO after Co-founder Ashneer Grover’s ouster.
BYJU’S, the world’s most valuable edtech company, appointed a CFO in February after running into a series of controversies. Ajay Goel, a finance veteran with previous experience in companies like Vedanta, was entrusted the job.
What is driving this sudden change? Experts believe the past few months have taught start-ups many lessons. The “boom and bust months” have compelled these tech-enabled businesses to hit reset, and forced a paradigm shift in their functioning. From growth at all costs, the focus now is on managing finances well and achieving profitability.
WalkWater’s findings echo other experts’ opinions. The report noted that this is a challenging time for start-ups and CFOs today are called upon to shape the growth of the company, drive mergers and acquisitions and lead investor and board relations. As a result, the demand for CFO recruitment has intensified.
Source: Business Today