History is littered with failed start-ups that promised big things but failed to deliver – one common feature of such disappointments is a founder who did a brilliant job of getting the business off the ground but lacked the skills to scale it. In that context, credit is due to the founders of fintech Pipe, who are stepping back from operational control of the business. Pipe will announce today that it has hired Square executive Luke Voiles as its new CEO.
Pipe is a financing platform that enables growing business with recurring revenues to raise capital against future sales by selling them to investors. As Forbes reported last year, Pipe has helped 23,000 companies offer $7 billion worth of assets to investors in the three years since its launch. Founders Harry Hurst, Josh Mangel and Zain Allarakhia built the firm from scratch and have raised more than $300 million from investors in the business.
Now, however, all three are stepping down from executive roles at the business, with Voiles due to take the CEO’s reins later his month. “We believe that Luke is the right person to unlock our full potential and lead us into the next phase of operational excellence,” says Mangel.
Voiles’ career history certainly suggests he could be a good fit. He worked in a series of roles in credit investment before moving to Intuit, where he led the team building its small business lending unit, and then to fintech giant Square, where he was general manager of Square Banking. In his role at Square Banking, Voiles led the teams responsible for scaling and managing Square Loans, instant transfer, Square Checking, and Square Savings globally. The Square Loans business is now lending more than $1 billion each quarter, making it one of the largest alternative lenders to small businesses in the world.
“Timing really matters,” says Voiles of his appointment. “I’ve got the product development experience and the leadership experience that Pipe really needs; it’s a business that has raised a lot of money and is ready to go to the next level.”
The new CEO does not envisage any major change of direction at Pipe. Rather, his role will be to execute at scale on Pipe’s founders’ vision. “The fintech revolution is only just getting started – there is going to be a massive shift,” he predicts.
Pipe’s incoming CEO, Luke Voiles
Voiles is also among the first to applaud Pipe’s founders’ decision to step back. “It’s a low-ego move by the founders,” he says. “I think they recognise that dangerous moment for early-stage businesses, when they see that their idea works, but then have to confront all the many different things required to get it to scale.”
Not that the founders are disappearing altogether. Mangel and Allarakhia will retain board positions, where they’ll offer advice and support to their new CEO. Hurst is stepping down from the board, but will also stay on in an advisory capacity.
The business will also benefit from additional support from Albert Periu, CEO of Zilch USA, who is joining the Pipe board this month. Periu’s previous roles include stints at Funding Circle, the online lending platform that built substantial businesses in both the US and the UK.
The shake-up at Pipe comes as the business continues to grow. Its initial focus was on businesses in the software-as-a-service space, but more than 50% of trading volumes now come from beyond this segment.
“We are in a transformative period in the evolution of fintech,” adds Voiles. “Embedded financial services are disrupting the status quo and Pipe has the opportunity to demonstrate to the world what the future of capital access looks like.”
