This interview is part of Scaling Enterprise FinTech | The Handbook, launched in Sep. 2021 in partnership with SixThirty Ventures and Money2020 Europe. Whether you are a founder with an idea, an early stage startup looking for inspiration and learnings, or an investor or financial institution looking to understand the difficult but rewarding journey to building a world-class Enterprise FinTech firm- download The Handbook.
1. Tell us a bit about yourself and your company.
I am Teo Blidarus, CEO and co-founder of FintechOS. We allow banks and insurers to create customer-centric digital financial products and services using our digital on top and lean core solutions. Many financial institutions who want to innovate quickly are underserved or ill-served by current vendors. Our low-code, modular approach augments legacy systems and allows institutions to build, test and scale new digital products and services in weeks, rather than months.
2. Give us the backstory- how did you get the founding idea, and how did the first sale come about?
I’ve been an entrepreneur for two decades and founded FintechOS in 2017. We saw that digital transformation at banks and insurers projects were often lengthy, complex and expensive, so developed FintechOS to make building digital products fast and easy for our customers. We wanted to help create solutions that use data as the core, fit market reality and are adaptable to our customers’ needs.
3. Could you summarize your journey to scale from a sales, go-to-market and business development perspective, perhaps split into 2-3 key phases?
We have enjoyed several major funding rounds, starting in 2019 when were raised more than one million euros from regional VCs and LAUNCHub Ventures before closing a €12.6M round led by Earlybird’s Digital East Fund and OTB Ventures. Then in 2021, we raised $60 million (€51 million) in Series B funding in a round led by Draper Esprit.
We’re now focusing on global expansion and have added 120 new staff – a 40% increase in headcount – and are now working towards setting up new offices in the USA, Dubai, Singapore, and other locations.
4. Which was the most challenging phase, and what would you have done differently?
The most challenging phase is happening right now. We’re expanding fast and growing our headcount, which means focusing on everything from developing our internal culture to deciding how a FintechOS office should look and feel. We’re focused on growth and things are happening fast, so the time to look back is a few years away.
5. When did you decide to expand to the international/ US market, and how?
There are more than 320 million bank customers in the US, who are now expecting digital services. Market penetration of digital banking will increase from 75.4% of all US bank users to 80.4% by 2022. The expansion to the US makes sense.
We launched in the US in 2021 and are forging links with American credit unions and traditional banks with a view to removing common obstacles to digitalization. We’ve appointed a new Senior Vice President to drive our expansion in the US and our customizable technology will allow institutions to start small, think big and scale fast.
6. When did you first decide to raise venture capital, and what has been your approach to financing growth over the years?
We’re delighted that the market has shown confidence in us during several major funding rounds. As well as funding rounds, we also won $10 million of investment from IFC — a member of the World Bank Group. We’re pleased that that market has shown faith and trust in us, with Series A and B funding helping to catapult us to where we are right now.
7. How is building an Enterprise FinTech firm different from a “regular” SaaS / Enterprise Tech company, and what three things should founders get right?
The financial sector is highly regulated, has its roots in analog, non-digital services and has only adopted direct to consumer models relatively recently. Digital-first players like neo banks have focused on making products that are simple, friendly, innovative, and can be brought to market very fast. All three are hard for incumbent banks due to their size and history – even though they know what good looks like.
In the enterprise space there is always a battle between innovation and manageability.
Due to their size and history, it is very hard for old players to innovate at the speed of their digital native counterparts. Banks need to strike a balance between the dreamers and the actual day-to-day management of the bank’s operations. The fintech revolution can be a headache for established incumbent financial institutions.
For an enterprise fintech to be successful, it must remember three key points.
- – Firstly, it should showcase tangible benefits that can be achieved. It’s no good making pie in the sky promises and failing to deliver.
- – Secondly, a fintech should talk the language of its customers. If you’re working with banks – you should be speaking like the people who work inside that bank and recognize that tech team innovators might not talk the same language as business leaders. It’s your job to crack the code and start communicating with the right people.
- – Lastly, an enterprise fintech needs to have a product or platform which makes practical innovation faster and easier. It’s difficult and time-consuming to devise new ideas, solve problems and design products – but innovation is non-optional. Founders should seek to give businesses tools and platforms which grant them the ability to innovate at speed and bring new solutions to market quickly, because those are powerful abilities in an era of rapid digital change.8. What’s on the priority list for you and your team for the next year?
We’re now focused on US growth and winning big name clients across the world. FintechOS believes in collaborating, so we have forged strong partnerships including Microsoft, Deloitte, Persistent and Capgemini and collaborations with US category leaders, analysts, consultancy firms and investors.
We hope to have 15 new US bank and credit union partners by the end of 2022 as well as making 100 new US hires across product management, sales, marketing and customer success. By the end of 2022, our total global workforce will total more than 400.
9. Where is the financial services sector headed in the next 12-18 months, and what should we be watching out for?
Not all financial markets were at the same stage of their digital transformation when COVID-19 changed the world. For more advanced markets we will see established banks, credit unions and new entrants in the fintech space rapidly launch digital-only customer products to meet growing demand. In more traditional markets where financial institutions had to digitize quickly to survive, we will see them in many cases accelerate their digital transformations using technology that is available and accessible to all institutions. This will allow them to easily vault challenges which more advanced banks had to painstakingly work over.
Customer experience will only continue to grow in importance to become the key battleground on which financial players will compete. It is a time of change, and the banking sector will look very different in a few years’ time.
10. Your favorite place(s) for a meal, coffee or drink (pre-/ post-COVID19)?
Before the pandemic, my favorite place to eat was Stadio Park, in Bucharest. That’s where we used to head after work to watch the football, have a few drinks and get a meal.
As the pandemic travel restrictions lift, we’ll be drinking and eating at restaurants around the world due to the international expansion of FintechOS. But I’m looking forward to getting back to Stadio Park.