Fintech company Lanistar Limited burst onto the scene early this year and already has over a million users pre-launch and is potentially valued at around $1 billion. With that in mind, it seems especially strange that a company with so many users is currently finding it difficult to secure funding. So why is this the case? This article delves deep into the hot topic that is Lanistar Limited and its funding-related difficulties.
Who are Lanistar Limited?
For those of you who are unfamiliar with Lanistar, they are a social media-focused fintech company that offers a new banking alternative. The company has developed a polymorphic payment card. The bonus of the new card is that you can ‘stack’ up to eight bank cards onto the Lanistar card (meaning by using an App you can convert your Lanistar Card into one of your other cards – so carry one instead of many cards in your pocket!). The branding is fun, fresh, bright, colorful, and eye-catching.
Valuation comparison: Lanistar, Revolut and Nubank
The last year has seen significant growth in popularity for Lanistar. Lanistar is potentially valued at an impressive $1 billion, and they already have 1 million pre-registered users. Considering that Lanistar has not even launched yet, it appears as though Lanistar could be some serious competition for the likes of Revolut who are valued at $33 billion with 15 million customers which is accumulated over 7 years Similarly, Nubank is valued at $30 billion with 40 million customers over the last 8 years. To put this into perspective, Lanistar gained 1 million customers in just 9 months. This fact alone shows the sheer allure and intrigue surrounding the fintech company.
What Lanistar is hoping will set them apart is that the company has launched an influencer marketing program that had roughly 3000 influencers taking part in the project. The results have been impressive with the start-up boasting an impressive 257k followers on Instagram in the last year compared to UK’s most valuable Fintech, Revolut who has gained 144k followers over 7 years.
Where did it all go wrong?
However, behind the pretty branding lies a controversial company that has been in the headlines a lot recently, but for all the wrong reasons. Seven ex-employees of the company came forward with reports of bullying, harassment, and unpaid wages.
Whenever something goes wrong there is always going to be an exchange of ‘he said, she said’. After the reports that came out from previous employees, Lanistar’s CEO, Gurhan Kiziloz has become a prominent person in the news. He has very recently done a full profile with an unnamed journalist and this piece is highly anticipated as he tells all on what truly went down, he acknowledges his mistakes and shares how he intends to fix them.
The first thing that Lanistar was attacked for was its toxic working culture, with claims that bullying, and harassment were daily occurrences. The reports from previous employees claim they were subject to sexual innuendos and the ‘losers table’. Employees were subject to the losers table if they were unable to meet sale targets. As if this wasn’t bad enough, several employees were not paid for their time and work. Unsurprisingly, once all this information was released, Lanistar’s reputation was in tatters, and rightfully so.
How Did This Affect Funding?
As you can imagine, investors are not keen on putting their money into a company that is at the center of a scandal. Despite Lanistar’s impressive potential value of $1 billion, their tarnished reputation led to a reluctance for investors to bring funding. Industry Rumblings suggest that Most VC And Private equity firms are waiting to see Lanistar post revenue and become an established player before they invest. One of the key ingredients in investment trusts and the news articles published on Lanistar impacted their image significantly. No investor wants to take a gamble on a company that’s in trouble. Consequently, this made Lanistar’s financial situation even worse.
Once a reputation is tarnished, it can take a long time to rebuild it. Lanistar hopes to launch a new kickstart fundraising campaign soon to secure more funding it needs to get to launch – if achieved this could be a gamechanger for the company. How the next few weeks pan out will be very interesting and will determine the future of Lanistar.
Did Lanistar learn its lesson?
Lanistar’s CEO, Gurhan Kiziloz, claims to have learned from his mistakes and is ensuring that the once toxic workplace is now a safe, productive space for all employees
According to recent reports, Lanistar has taken the following actions.
- Staff wellbeing is a priority for the company.
- Plans are being made to clear all outstanding salary payments.
- Any staff member that exhibited a sign of workplace bullying has been removed.
- Lanistar hosts ‘Motivational Wednesdays’ and Gurhan Kiziloz runs weekly seminars on ‘Achieving Your Goals’. Current employee, Marcello Bernstorff, said that ‘participants in the workshop write down their five-year goals and Gurhan helps them understand what they need to do to achieve them.
- Workplace socials – these alcohol-free events give everyone a chance to get to know their colleagues, forming a tight-knit and supportive community.
- Appreciation is an important value that Lanistar is pushing. The company is trying to ensure that all employees feel valued and that their worth is recognised.
Actions speak louder than words, and hopefully, Lanistar CEO can stick to his word this time around.
What’s next?
With measures in place improving how the company is run, will their Kickstart fundraising campaign be a success, or will it be another flop for Lanistar? It is difficult to predict what will happen next, but Gurhan Kiziloz seems determined to make Lanistar a success and stated:
“We currently sit at just over 1 million registered customers amidst all the controversy and at record speed, this fact allows me to manifest and visualize that the adversity we are facing will only be a small paragraph or a few sentences in my autobiography in a few years.”
Whether Lanistar can pull this off or not will heavily depend on the success of its fundraising mission.