From a green unicorn supported by celebrities to the risk of disappearing and making a fool of yourself. This is the story of Aspiration Partners, the American startup that has taken flight in the fintech sector thanks to an approach oriented towards sustainability, but also to the support of a group of high-profile investors (such as Leonardo DiCaprio and Steve Ballmer). But what seemed to be a guaranteed success story has turned into a parabola of rise and fall, culminating with an investigation by the US authorities for suspicious non-transparent operations. And now the future is very uncertain.
Founded in 2013 in Los Angeles, Aspiration Partners immediately presented itself with an ambitious goal: to redesign the American banking landscape through a unique offering, a debit card designed for sustainable purchases and investment accounts free of fossil fuel-related stocks. In an era in which sustainability has become a priority for many consumers, the startup found fertile ground for rapid growth. And it immediately attracted the attention of celebrities, such as former Microsoft CEO Steve Ballmer, actors Leonardo DiCaprio, Orlando Bloom, Robert Downey Jr and Cindy Crawford. Thus it became a unicorn in the world of startups, with a valuation of over 2 billion dollars.
Once this valuation was reached, the natural step seemed to be a stock market listing. Everyone was happy, the company and investors (celebrities and not only). But the road got complicated. Aspiration began to expand its business lines in an attempt to increase revenue and demonstrate continued growth in the eyes of investors. Among the new initiatives was the sale of sustainability services (such as tree planting on behalf of other companies) which became a central component of the growth strategy. This attempt at diversification, done more hastily, attracted investigations by the authorities. Currently, Aspiration is under investigation by the Department of Justice and the Securities and Exchange Commission (SEC). Inflated revenues, dubious agreements and made in too short a time. The company allegedly declared revenues from tree planting contracts that were not supported by adequate controls and checks. This raised doubts about the real financial strength of the startup and the sustainability of its business model.
Today, Aspiration is struggling to stay afloat. Investor confidence has been shaken by investigations and allegations of non-transparent operations. This has led to a significant decline in the company’s value and difficulty in raising new financing. The challenges to regaining the trust of markets and investors are twofold. On the one hand, it must demonstrate that its operations are transparent and that its revenues are legitimate. This will likely require a thorough review of its business practices and the implementation of more rigorous controls. Second, and crucial for a company that has earned and grown a lot also thanks to its image, it must work to regain customer trust.
What does the story of Aspiration Partners teach us? A lesson for all startups in fintech and beyond. Innovation and rapid growth can attract the attention and support of even high-profile investors, but transparent corporate operations and sustainable business models in the long term are the ingredients for survival, after the initial growth.
