One of the most formative experiences Matt Newcomb brings to his role as CFO of Chime, the mobile-banking company that’s grown to $25 billion in valuation in just a few years, is failing as a founder.
After leaving BlackRock as an advisor in 2012 and returning to school for his MBA, Newcomb and some of his classmates founded a company that tried to tie digital technology to educational objectives to help kids learn as they play. But the company, called DigiPuppets, struggled to gain traction and had to be wound down.
“I called our investors, who were largely friends of the family, and told them we would not be returning their money,” Newcomb said in an Airbase webcast. “It was one of the hardest things I’ve ever done in my career.”
Early apps the company produced were downloaded several hundred thousand times by users and data appeared to validate the product thesis, Newcomb said. But the company never mastered the branding and billing thesis.
“We were trying to bridge the physical and technical play dimensions for kids in a way that furthered educational outcomes,” he said. But after taking a hard look at the company’s traction, and whether there were ways they could pivot the business, they decided to pull the plug.
“Coming out of that, I felt this need to explain myself,” he said. “I was a little bit ashamed at the experience and outcome of the business, but the more that I talked with mentors, friends, the more I realized how much of an asset it was to have that failed founder notch on your belt. We learned every chapter of the early-stage startup the hard way. That built a lot of resilience, and showed me what it really means to iterate a business and helped me think about the bigger picture in addition to the more nitty gritty execution of the operational stuff.”
The experience also led him to Chime, whose business model he researched, along with the broader fintech space, while at a venture capital firm he joined after his business collapse.
“I took a year before joining Chime to study some early successes in consumer fintech,” he said. “We had quite a few point solutions starting to take off. You had some of the online lenders gain some traction, robo-advisors build some [assets under management] in their digital-only product offerings, and some [personal financial management] companies build a user base, but just not a lot of innovation in the core checking account business. Eventually I came across the [founders of] Chime, and that was a strategy they were pretty squarely executing against.”
When he came on board in 2016, the company was sharing space with its ad agency and had about 20 employees, none of them in finance.
“By joining that early, I had a mandate that was broad and was jumping into a culture where everybody pitched in to get the job done,” he said. “It wasn’t just standing up the finance functions; it was the people and legal functions as well.”
Newcomb said he was upfront from the beginning about wanting the chance to grow into the CFO role.
“You don’t get opportunities like this unless you are clear and ask for them,” he said. “I was honest about that with [the CEO] and pretty early on in my intention to get there, so there was no question around that.”
The flip side of making your intentions known is performing up to the standard that’s expected, he said.
“It's about doing the work and building the trust every day,” he said. “There’s just no substitute for doing the work, putting points on the board. Fortunately, Chime is a culture that rewards what we call making-it-happen. I’ve been fortunate to be able to do that because of the opportunity the founder has given me. He’s said you don’t have a ceiling, so it’s up to you to make it what you want.”
Newcomb said he’ll take that same hard-work approach if the company decides to go public and keeps him on as CFO rather than replace him with someone who’s been through that process before and knows how the CFO seat differs once the company goes public.
“I’ve had to adapt to the reality of the [fast-growing] business, the scale of the business, the new problems,” he said. “The firehose spigot has just gotten stronger. The next stage of Chime, potentially one day being a public company, is just an extension of that…. If I’m being honest, I don’t know if l’m going to like [being a public company CFO]. But I know the challenge itself is an important part of the equation for me.”
Already he’s had to adapt, in just a few years, to how he defines the CFO role for the several growth stages the company has been through.
“What worked as a 20-person company didn’t work as a 100- or 200-person company and doesn’t work as a 1,000-person company,” he said. “We’re trying to build robust, mature company processes that will serve us well many years from now. That’s very different” from what he focused on in the early days. “It was really just about keeping the lights on. We had some core processes, getting financial statements out, just some of the basics. We weren’t necessarily trying to excel in that.”
On the team-building side, the biggest challenge is figuring out the role he should play as CFO and structure the finance and accounting functions around that.
“You need to solve for domain-specific experience,” he said. “We’ve brought in a ton of experience on the accounting side, internal controls, tax, treasury, and real deep operational experience, in FP&A and strategic finance, where we’re helping to make high ROI business decisions.”
The range of domains the CFO oversees makes it important that professionals who aspire to the top finance seat make up for what they lack by leaning into their intellectual curiosity.
“The lesson is just to stay open,” he said. “The role I’m in now is the best fit I’ve ever had in my career. It leans into the things I’m better at, with work I find intellectually interesting and rewarding, and at a company I have a lot of affinity for from a mission and business-model perspective.”