Predicting Break-even in FinTech Startups as a Signal for Success

FinTech startups drive innovation and competition in the financial services industry. An early milestone for these startups is to achieve break-even, which sends out a positive signal to the market – and to potential partners and financial institutions – by demonstrating viability and lower perceived risks. Our analysis of proprietary survey data using logit and random forest, interpreted through SHAP values, indicates that external funding significantly decreases the likelihood of a startup reaching break-even. This negative impact can be traced to strategic misalignment with investor expectations, delays in the implementing of stringent financial management practices, and an emphatic focus on rapid growth.