Why Judo's maverick CEO regrets going public
While going public is the end goal of many startups, Judo's CEO Joseph Healy says it fundamentally changes a company and regrets going down that path.
Judo Bank chief executive Joseph Healy has admitted he regrets taking the neobank public, saying they were forced to go down that route by investors. Asked at the Intersekt 2023 conference on Wednesday about what advice he would offer other fintechs exploring an IPO, Healy did not hold back. He urged any fintech with great growth prospects to stay private as long as possible.
“I personally wish that we had not become a public company two years ago,” Healy said. “But you know, we had raised $1.2 billion of capital privately and some of our shareholders were asking when they were going to see some liquidity.
“So we kind of were convinced that being a public company was a good idea.”
Judo went public in November 2021, becoming the first bank to list on the Australian Stock Exchange in 30 years. At the time, Healy told reporters it was “an important milestone for our business as we continue to deliver against our purpose, and build a truly world class SME business bank.”
Its shares have fallen by about 60% since then, easily underperforming the broader market over that period.
Healy said he had assumed that Judo would just continue doing what they had already been doing after listing, but over time conflicts have arisen.
“You suddenly realise that you've got investors and analysts looking for more profits every year,“ he said. “And you think, well, actually, I don't want to run this company for the short term. I can make more profits next year, but I'm thinking about five years ahead.”
He said he didn’t always agree with investors on what was right for the company — and told them to apply for his role if they disagreed with him.
“I’m not going to be taught by short-term investors about how to run the business given that this is a purpose-driven, values-led organisation,” Healy said.
He reflected on the pressures that come with share price fluctuations, “something that I am living right now with our stock being down about 25% from last Thursday.”
Given companies fundamentally change as soon as they become public, an IPO should not always be an end goal, Healy said. “The answer might be not to IPO, but to look for a strategic buyer or merger partner, because that's going to serve the best interests of the company,” he said.
Company culture was also a subject Healy touched on a few times saying that when growing a company “ financial capital and technology will get you so far, but the X-factor in any business has got to be its culture.”
“Culture is something you've got to think about at the very beginning.” he said. “When thinking about it you need to ask ‘what does this look like in 10 years?’"
