Building a Public FinTech Company From Scratch: OppFi CEO Todd Schwartz (Part 6)

Sramana Mitra: What scale are you at right now?

Todd Schwartz: This year, we’re in the over $400 million range.

Sramana Mitra: When did you go public?

Todd Schwartz: In 2021 on the NYSE. When I walked up to the stock exchange, it was never about financial gain. It’s so funny to me to see OppFi on the banner. This was literally about helping people. I want to make that clear. If financial gain is the reason you’re doing it, your heart and soul won’t be in the business.

When I started, there were 14-hour days. If you’re passionate and you’re solving a bigger problem and issue, that is what drives me. It still drives me today. Monetary gain will come. We wanted to reward our management for all the hard work they had put in. It felt great. It was a validation. It was funny and ironic that we had gotten there.

Sramana Mitra: What was the IPO valuation?

Todd Schwartz: $870 million.

Sramana Mitra: Are you at a billion-dollar valuation?

Todd Schwartz: No. The market has hit things hard. In the current economic environment, there are some challenges. When inflation is sustained for a long period, it eats into our customer’s discretionary income. We have a lot of experience. We don’t ever grow beyond our means.

We always say this. It is important that people are successful in our system. We need to make sure that we are verifying people’s ability to pay and making sure that we’re living our mission. We’re keen on making sure that we are finding segments of the population that want to improve but also afford to pay back.

Sramana Mitra: Otherwise, you don’t build a business.

Todd Schwartz: Right.

Sramana Mitra: What I like about our story is you build about an $800 million-valuation company with $7 million and some debt.

Todd Schwartz: Yes. When management would come to us and say, “How fast do you want to grow next year?” I say, “How fast does cash flow allow growth?” We could take equity on. It’s going to affect us. Do we really want to do that? We’re not trying to land grab market share. We want to be around for the next 20 years. If you’re going down the expressway and someone cuts in front of you and you’re going 100 miles an hour, you don’t have a lot of time to course correct.

Sramana Mitra: You have created a lot of options for yourself because you have executed well and delivered good metrics. The problem with a lot of these exceedingly equity-funded companies is there is no financial discipline in these companies. Very often, they do very poor unit economic deals. They’re, very often, unprofitable companies.

Todd Schwartz: You’re right. One of the issues is, you see Facebook. They were a free social networking site. Let’s get as many users as we can and then figure out how to make money later. Even Google to some extent. Amazon has been like that. Their delivery and transportation business makes very little income. Being able to stomach cash burn and equity losses to gain market share and figure out unit economics later is a new phenomenon that we haven’t traditionally seen in the business world.

Sramana Mitra: There are two schools of thought. There’s the fundamentals-oriented school of thought. It is your school of thought and it’s my school of thought as well. Then there’s this hypergrowth model. Some of that has worked. A lot of casualties have come of that too.

I love your story. I love stories like these where it’s capital-efficient and fundamentals-oriented. Thank you for your time.

This segment is part 6 in the series : Building a Public FinTech Company From Scratch: OppFi CEO Todd Schwartz
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