“I wanted to be a CEO that was like a founder, because for me that’s the best CEO. So I needed to have a significant shareholding which made that so.”
Getting Habito on track to profitability
Tan is now Habito’s largest shareholder, having invested a seven-figure sum into the business, which announced it had closed a funding round at the same time as Tan’s appointment.
“A lot of the closed round of funding was from my own money. How we plan to use that is to continue to grow the business, but doing that in an organic, sustainable way.
“In a world where the wider macroeconomic environment is much tougher, you need to make sure you’ve got a position where you’re not just relying on the next funding round.
“So first of all, it was used to steady the ship, and then it’s really going to be investing in the business to make sure we head towards profitability, rather than just continually carrying big monthly losses.”
In a LinkedIn post, Tan says he received a lot of public support when taking up the CEO role at Habito, but that “naysayers and detractors in private have been quite prolific”, citing sentiments such as “Don’t waste your money” and “It’s a sinking ship”.
But earlier this year, Habito announced it had recorded its first monthly profit in September. Annualised losses are expected to be circa £2mn for 2023, down from £10.7mn in 2022, with Habito on track to reach full-year profitability by the end of 2024.
The broker also said that since June – by which time Tan was CEO – there had been a “relentless drive” in controlling costs.
“My focus, if I can be candid, was very much on ensuring the business was operated like a business that wants to make profit, and not just chasing growth at all costs. And therefore we had to look at some of our cost base.
“But that doesn’t mean cutting salaries or making redundancies. In fact, far from it. None of those happened, with the exception of an outgoing leadership team. There was an outgoing leadership team when I arrived.
“What I mean is negotiating better contracts with third parties. Having built a similar business, I knew what a fair commercial price was. And this business had been paying more than it probably should have for certain contracts. And that was addressed, and is still being addressed as we speak.
“So the first stage of my tenure was really to ensure we get to profitability. And to do that is to maintain, if not grow, our revenue, and manage our costs without damaging the culture or feel-good factor of the business. That’s not easy, but touch wood, I believe we’ve done that, and we’re moving out of that stage now into very much growth.”
