CEO at Relevant

7 Founders on How to Launch a Fintech Startup: Stories and Tips

December 20, 2021

Relevant Founders

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The fintech startup market is on the rise.

Researches show a significant increase in the number of fintech firms in different regions over the last years. And it seems like Silicon Valley is not the only attractive spot for them. 

As of February 2021, there were more than 9,300 fintech startup companies in EMEA and over 6100 startups in APAC regions.

The investments in fintech projects keep growing. The most promising startups managed to attract millions of dollars from venture capitalists and reach incredible valuations.

And yet, like in any other industry, it’s not just good days in the fintech world, and fintech entrepreneurs face their own challenges.

We asked seven founders of promising fintech startups to tell us a bit of the sweets and bitters in their startup journey. They told us about their amazing projects, highlighted the most interesting industry trends, and shared their tips for the present and future fintech entrepreneurs.

Here’s the quick list of fintech experts who have contributed their insights:

Toby Lewis, founder and CEO at Novum Insights, a global market monitor of complex technologies, tracking industries like cybersecurity, blockchain, and DeFi.

Katya Dorofejeva, co-founder and CEO at Finadvant, a business banking platform for SMEs that trade internationally.

Adam Maxwell, founder and CEO at Elevation Digital Assets, a platform, that provides a single access point to the digital economy.

Koray Koska, founder, and CEO at VitraCash, an application, that allows users to connect all of their payment methods.

Robert Pasco, co-founder of Plend, a ‘Social lending marketplace” that allows people to lend to each other at affordable rates.

Kathryn Miller, co-founder of Templar Payments, a fully white-labeled digital-first merchant onboarding platform and payment gateway.

Nikos Melachrinos, co-founder and CEO at Quirk, a budgeting app that helps users manage their money in ways that match their personality.

Could you please share how your company evolved from an idea to a startup? What’s the story there?

Toby Lewis: So Novum Insights is a research business of blockchain and DeFi. We provide data science and analytics on everything that’s going on in blockchain and DeFi helping investors understand the best investment opportunities.

Toby Lewis founder, and CEO at Novum Insight

When I was setting up about five years ago, the key for us was to build a successful data science-driven company. We’ve iterated, we’ve provided technology advising, done a bit of AI, and even looked at the circular economy. 

But last year, when Uniswap V2 came out, I thought the product was one of the first proper crypto decentralized products that actually worked well. So we decided to double down on that. 

We’ve mapped all the data on Uniswap V2, and then we’re going to map the data on Uniswap V3. We’re also looking at doing that across all the different blockchains and all the different decentralized exchanges.

Adam Maxwell: The mission of Elevation Digital is to facilitate the digital transformation of economy. 

There is so much more to the digital economy than just trading or investing in cryptocurrencies, and there are very highly sophisticated instruments that represent truly remarkable innovations. 

We are developing the user interface, an aggregator, a unifier of market innovations and solutions to produce a personalized ubiquitous, and seamless multi-sided platform for the digital age.

There are incredible, remarkable solutions that most people don’t understand. One can spend forever exploring these markets yet still fail to engage them due to the lacking interface effectively. 

So there are two main ideas that we’re solving – we expand people’s realities and facilitate that experience through optimized and enhanced infrastructure.

Katya Dorofejeva: Previously, I worked for several fintech startups in the payment domain, and I really enjoyed it. It’s quite a good niche to work in. I understood that payments are a much bigger industry than I thought. 

And no matter how regulated this sector is, businesses will still need payment services. Finadvant was born with that idea in mind.

What makes Finadvant different is that we entered a niche that is very hard to be approached. Most similar digital banks only claim that they work in the B2B sector, but in fact, they provide services to freelancers, sole traders, and one-man shops. 

You can compare our services to high street bank services. Despite being digital, Finadvant offers our customers a personal approach. 

Our clients don’t have to speak to chatbots or wait on a service support line for hours. Instead, they have a dedicated account manager who knows about every problem they have and always available to help.

Robert Pasco: I came to the UK about ten years ago from New Zealand, and throughout that time, I’ve been working in accounting, tax advisory, and credit structuring in London.

I started Plend from my personal experiences with poor credit sourcing. When I first arrived in the UK, I was completely invisible from the credit reference agencies, which held me back from accessing affordable credit. This led to me and my co-founders trying to build a solution that could solve this problem. 

We worked out the main issue with credit scoring is the data itself and, if we could ‘improve’ this data, we could then enable people to be able to borrow at lower rates via Plend. 

Kathryn Miller: Initially, my co-founder Nathan and I planned to create an Independent Sales Organization (ISO), but at some point, we realized that it’s not what the market needs.

Today, loads of banks have their own onboarding processes, but it doesn’t solve the problem for the ISO salespeople and merchants. 

They still have to go to each bank’s website and do a completely different onboarding process, and it’s no better than the merchant application forms in PDF or Word. So that’s why we evolved into a software company.

Koray Koska: I travel a lot, and I use many credit and debit cards because each of them comes with certain benefits or perks. But it isn’t easy to select the right card for payment. 

At some point, I started to use credit cards for flights and hotels and debit cards for everything else, but later I found out that I lost a lot of money because of the wrong choices. 

Calculating which option is better – a credit card with cashback points or a debit card with an exchange rate – is time-consuming and complicated, so many people struggle with that. 

This is how I came up with the idea of combining multiple cards, of creating an algorithm that knows all the parameters and makes a decision within seconds. This is how our journey began.

Nikos Melachrinos: I worked in several tech startups, and then I moved to London to get a master’s degree in design as I was very interested in product design and building products myself. 

That’s where I met my co-founder. She has worked in Silicon Valley startups for the past seven years in the marketing side of the business. 

At some point, we felt that there was a big gap in the market when it comes to financial education and personal finance. So that’s why we decided to build Quirk.

What was the hardest part of launching fintech?

Katya Dorofejeva: For us, the most challenging of launching a product was the fundraising process. As we had never done fundraising before, we didn’t know how investors think.

For example, when doing our calculations, we focused on revenues and how much money our clients would pay us, so we can become profitable. To our surprise, investors don’t need a startup to become a profit-making business.

Instead, they pay much more attention to such things as the number of customers. Investors want to give you money and get your valuation up, so they can make a good deal afterward.

Katya Dorofejeva, co-founder and CEO at Finadvant

Robert Pasco: We’ve already had a decent amount of demand without even marketing our platform, especially for lenders who are looking for yield in this low-interest environment. Many investors are looking to diversify and more now keener to make direct investments. So we had a lot of people signing up on our waitlist, which has been very exciting. 

Our challenge is creating a quality ‘asset class’ for these lenders – which are the near-prime borrowers who are coming to us because they have been rejected elsewhere.

At the moment, the consumer credit market it’s very saturated, and there are so many options out there for borrowers (including a big spike in ‘Buy Now Pay Later’ solutions. So if you’re too late, they may well go elsewhere and pick up a more expensive credit product.

We’ve got a couple of partnerships lined up with third parties affiliates in this space, but ultimately, it’s something we have to actively manage and ensure we have enough volume coming through to the platform

Adam Maxwell: The hardest part of developing such a financial technology is building the foundations. Because we are targeting universal access, and because of the scale we’re trying to achieve, the foundations must be very well-thought-out.

The rapid evolution of the fintech industry allows you to create something absolutely cutting edge today, but within months, if this solution is not adaptable, it won’t work. 

So the most challenging thing we’ve had to do is build in the agility elements within every component of our conceptual architecture so that we can keep up with emerging innovation and remain on the cutting edge.

Adam Maxwell, founder and CEO at Elevation Digital Assets

Toby Lewis: At the end of the day, building a company is about the people you have around you and how they work together in the team. 

Achieving product-market fit is a challenging task too. In the crypto markets, raising investment is probably easier than finding product-market fit. 

So the hardest part is partly about learning how to lead and gel with the company, and then the other half is about being really laser-focused in how do you build a scalable business.

Koray Koska: For me, it’s very unusual to work in such a highly regulated industry. Our main pain point is not on the development side but on the compliance side of the project. 

For us, the biggest challenge at the moment is to get compliant with all the regulations to make sure that everything is done right so that we won’t be sued at some point because we didn’t do KYC right, etc.

Please tell us a little bit about your team. How do you plan to scale your project?

Katya Dorofejeva: Our team is relatively small now. There are two co-founders: I am responsible for everything related to sales, account management, and marketing; and my colleague Leonid is the CFO, head of compliance, and head of operations. 

There are also two compliance officers, two business analysts, one sales manager, and one account manager who serves our 15 clients.

Robert Pasco: We currently have a team of 7 which is spearhead by myself and my excellent co-founder James, who is the technical architect of the Plend platform. In addition, we are very lucky to be joined by Luke Lang (one of the Co-founders of Crowdcube), who has been supporting the Plend mission for the last 9 months and recently joined the team as our first Chairman and lead investor.

On the risk and underwriting side, we’ve also got Kevin Allen, who’s been in the industry for over 30 years and built a number of banking solutions, one of which was sold to Experian as their ‘off-the-shelf’ open-banking scorecard.

Interpreting this data is vital for how we iterate, so we can support our customers as they step through the next stage of their credit journey.

Adam Maxwell: The conceptual architecture is ready, and now we are engaged in the capital raising stage. In terms of organizational structure, we have a board of directors providing oversight and governance to the executive team. 

We have an advisory board to help manage that and provide expertise in particular areas such as AML, cybersecurity, legal, and strategy. 

How To Build a Fintech Product With 150 000 Customers

There is also a core executive team and some operational talents. We are looking to build and develop our technical team, and we are currently in the midst of prospecting for the chief technology officer (CTO) who will drive the vision of the solution that we’ve developed and bring that to reality.

Toby Lewis: We are a small group of very enthusiastic people. Our CTO was formerly a research scientist at CERN, and he’s very capable of building data products. 

There’s a good team of analysts. There are back-end and blockchain engineers in our tech team. We also have an experienced Ops specialist who is now the CFO and very helpful in scaling the business. 

There’s one more Ops professional who used to run crypto at Deutsche Bank. So we’re currently building a good platform and trying to make the company a nice place for people to work in.

Nikos Melachrinos: We’ve been building Quirk for two years now. We started from total bootstrapping and then joined an accelerator, which gave us the initial money to build an MVP and do a bit of marketing to get some organic traction. On the back of that, we are able to raise a pre-seed round. 

With the funding, we can hire more people, develop the product further, and work towards our public launch.

In terms of growing the user base, we’ve reached 10,000 emails, which gave us a good base. We now plan to start working with influencers, increase our own social media channels, and build more customer love, so our users want to share Quirk with their friends -these will help us scale the product. 

And speaking of fundraising, we’re going to raise another round at the end of the year. We’re also considering crowdfunding as it is an interesting way to combine user acquisition with raising funds.

What trends do you see in the fintech industry? 

Koray Koska: I think that most of the fintech companies will focus on transparency for the next five years, on either providing services that give transparency back or building fully transparent solutions from scratch. 

Koray Koska, founder, and CEO at VitraCash

A great example in this context is TransferWise. The main goal of this company is to give people transparency. It has never been about being the cheapest option on the market, but about making sure people understand what they pay and what the provider gets. 

This gives people much more trust in a system than, for example, when something is free of charge. 

Katya Dorofejeva: Today, businesses are struggling to get financing from the existing banks; therefore, many companies are trying to address this challenge and go to the B2B sector instead of retail. 

The second trend I can see is startups moving in the direction of building complex products for SMEs. 

And the third trend is the emergence of aggregators, companies that develop solutions for other firms that sell services to consumers. 

Consider an example of a company that aggregates the banks and lending institutions that provide lending services. In this case, merchants who need money address the aggregator who finds the best loan option based on the merchants’ given criteria such as credit rating, country, etc.

Robert Pasco: We have seen some significant innovation in the banking as a service space, which has helped take some of the hassle away from frontline B2C Fintechs (including ourselves!).

Another trend of interest to me is ‘open banking’ and ‘open finance’. Currently, only about three million people have used open banking in the UK over the last three years, so there is a lot more growth in this market to be had.

There is going to be more data points available that the customer has control over, which will allow them to provide more data to B2C platforms, so they can offer much more tailored products. 

Embedded finance definitely is on the uprise as well (for better or worse!). I think we are in for a lot more disruption in this space, especially on the credit side.

Toby Lewis: DeFi is one of the best areas to get a strong yield and compounding return in any financial market in the world. With DeFi, the key for people is understanding what is real, what is not, and what risks are there. 

And that’s a role we as a company play – we help people make smart decisions in the DeFi landscape.

We will see a lot more usage of both the crypto and the blockchain space in the future. There are new projects linked to some of the protocols, such as Ethereum, Solana, and Polkadot. And think it’s super exciting that things like Lightning are coming online. 

The driver of crypto is how you get new forms of payment and new forms of money. It’s bringing logic into money in different organizations. It’s been a huge bull run, and it’s going to get bigger.

Crypto has been a wonderful free-flowing, and easy market because it’s been led by consumers. Corporates are trying to build the enterprise blockchain adoption too, but a lot of it’s still very much the proof of concept stage, although they’re making some progress on that.

Kathryn Miller: Cryptocurrency is obviously the future. I don’t see any long-term sustainable players yet, anything that stands out, but that’s because the regulation can’t keep up with technology.

Regulators need to catch up because even the well-respected organizations such as the FSCA and BaFin and all other big ones move so much slower than the market. 

Nikos Melachrinos: One of the most exciting trends in the fintech market is that many consumer companies are adding social elements to their proposition.

A good example is an investing app called Public, which builds a community around investing in stocks. The platform allows users to share their portfolios and find out what others, even celebrities or well-known fund managers, are investing in.

Another big trend I can see is “embedded fintech”, which is that many non-fintech companies, like Uber, Instagram, and Shopify enter the fintech market by adding banking or payment capabilities to their product.

What advice would you give to startups that are launching their fintech product? What should they pay attention to?

Robert Pasco: A lot of your value in the business is your time – how you allocate this time is fundamental to your success and for this reason, It’s essential to plan out what you’re trying to achieve before you execute. 

Another point for Fintech is around regulation. It’s vital that you understand the regulatory environment you’re operating in and also conscious of the risks that may arise in the coming years.

Lastly, I always flag the importance of understanding what you need to unlock the next stage of your business. When it comes to fundraising, it’s important that you can take time to target and plan before you go out and try to raise money. You need to be sure of what you’re doing and what money you need to unlock the next stage of your business.

Robert Pasco, co-founder of Plend

Toby Lewis: A strong and charismatic founder can get quite far, especially if they have tech skills, but you need people to build a business.

Make sure everyone is on the board for the long term. Try to understand what everyone’s needs are and who’s motivated by what. 

For example, some people can work for six months, for a year without getting paid (they’re lucky), but that’s not the reality of a lot of people. And you’ve got to get in their minds. Try to understand whether they’re going to get paid in the next month or two and what they need in their life.

What is also important is to find revenue and investment to be able to really build that organization.

Adam Maxwell: When it comes to startups, three main features determine success: vision, execution, and timing. Having a great solution is not enough. Make sure that you have the right team. Having strategy, vision, and the people who are there to help you through that is critical. 

The best bit of advice I’ve received when it comes to fundraising is that investors don’t want to meet with you, they don’t want to speak with you, they want to hear about you, and then get in touch. 

In such a dynamic and chaotic environment, VCs are looking for bold projects, and they’re looking to be spoken to in a captivating, engaging, and unique way. The cold approach certainly does have its moments, but really what you need is warm introductions and notably getting your name out there.

Being bold in the market, really championing your solution and your vision, is what investors are looking for.

I would give one more piece of advice to make sure that you understand your value proposition, the problem you’re solving, and the user journey throughout your solution. You also have to ensure that agility is core to your solution there. You can have a great idea, but it simply won’t go very far if the solution is not agile.

Kathryn Miller: First, have faith and don’t take what you’re “supposed to do” for granted, as gospel, because it’s probably not. Second, learn about yourself as a matter of priority and take care of yourself as a matter of priority.

Third, be never dismissive of anybody because you don’t know what happens next. It doesn’t mean to give your time away freely, but don’t be dismissive.

And finally, give people the freedom to do what they can add value to. If you try to implement your own expectations on what your staff should be good at, you’re probably going to be wrong. Flexibility in a startup environment is very important. 

Everybody needs to be wearing lots of hats, just as the founders do. Remember that everyone in your team is just as good as you are.

Kathryn Miller, co-founder of Templar Payments

Koray Koska: “Do your research” would be definitely the number one piece of advice. Six months before our fundraising campaign, I researched how to launch a product, the suppliers and licenses we needed, the regulations we had to follow, etc. 

But I took not enough time, and I’m still finding out something new on those topics. If you are in the fintech field, you should do thorough research to find out everything you need.

Focus on not just moving fast, but also having a realistic timeline in your head. When it comes to fundraising, it will most probably take longer than you think and should be prepared to last longer with the money you have. 

Otherwise, it might blow up. You should always stay focused on your fundraising goals and understand at which point you actually need money. In later rounds, usually, you’ll have multiple investors, and all of them have to accept your term sheet. 

Sometimes there might be a conflict, and you should be ready to find a solution that works for all of them.

My next piece of advice would be – find a good partner. By partner I mean not just founders or your team, but also advisors who can guide you in the right direction. We were lucky to find great people who helped us create our product faster.

So finding advisors in the fintech world is crucial. And finally, remember that simply having an idea of a product is not enough. You should have a great tech team that will implement it.

Nikos Melachrinos: Be open with your audience. Tell them what you’re trying to build. Then, share what you’ve accomplished, whether you created a website or are testing a new feature. 

Some founders don’t share anything with their community, and some tell a lot about their business journey. And I think that being honest is a great way to rally people behind what it is that you’re building. When people see your progress, they become emotionally invested in it.

Also, one of the best qualities of a good startup entrepreneur is resourcefulness, the ability to learn new things or find a way to learn new things. A great way to achieve things that you’ve never done before is by having advisors.

You can find advisors among your investors. So when you’re picking investors, it’s essential to choose people with knowledge that you don’t have so that they can share their expertise with you. Of course, talking to other founders is an excellent source of knowledge too.

What is also important is to find a co-founder. It will influence and change everything for you both in terms of how you develop your startup, how you go through difficult times, how you leverage your networks, and so on. Having a co-founder is huge, especially when you are building a startup for the first time.

There is one more thing. When building a startup, you should focus on excellence, not short-term wins. You should understand that getting featured in a certain publication won’t guarantee you long-term success. 

When you’re thinking about longevity, it is vital to have a strategy where your company operates well with the help of a strong team that is not cutting corners. 

There will always be problems on your way, but your attitude towards solving those problems and your belief that you can get past them will define your long-term success.

Nikos Melachrinos, co-founder and CEO at Quirk

Katya Dorofejeva: First of all, I would suggest founders be realistic. Today’s market is a very saturated one. Simply having a good idea is not enough; you also need to know how to implement it or hire people who know how to do that.

My second suggestion would be – never stop. Fortunately or unfortunately, a startup is like a baby. It is your life. If you have a startup, you should be ready for sleepless nights and many problems you have never dealt with before. 

Even if you are a very experienced professional, you will find out that you don’t know so many things, and you have to learn them. So if you are not ready to take at least a two or three-year roller coaster ride, don’t do that. Stick to a nine to five job.

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