For years, anyone seeking a role model for successful businesses could look to the world of tech and fintech. Companies such as “buy now, pay later” pioneer Klarna — once Europe’s most valuable private tech company — commanded vast valuations, with investors funnelling money into their growth. But as inflation rises fast and the macroeconomic environment sours, unprofitable companies with an emphasis on simply building consumer numbers are looking increasingly exposed. Klarna’s valuation fell from $46bn to less than $7bn in a funding round this summer. For business students who have come of age in a time of “disrupters”, the lessons should be clear. The age of easy money is over, and growth at all costs is no longer a mantra that makes sense. The tech companies that dominate the future have to be built on sustainable foundations. The need to look beyond traditional ways of doing things partially reflects trends that predate the pandemic — a growing realisation that an emphasis on simply scaling up is insufficient.
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