Five lessons learned from launching one of Europe’s largest FinTech startups, with Pleo founder Jeppe Rindom
Five lessons learned from launching one of Europe’s largest FinTech startups, with Pleo founder Jeppe Rindom
Words Simon Lovick
April 29th 2021 / 7 min read
Ever since the first credit card was invented back in the 1950s, technology has increasingly influenced the way that financial services are conducted and delivered. We’ve seen fintech grow from ATMs to internet banking, more recently to cryptocurrencies and blockchain. The 2008 financial crisis is viewed by many as the catalyst of the modern fintech boom, as decades-old processes were quickly replaced by online technologies that enabled financial services to be more efficient, and perhaps more importantly, more trustworthy.
Successes of companies like Monzo and Revolut have propelled fintech successes. A recent funding round at online payments company Stripe saw the company’s valuation reach $95 billion, demonstrating the sheer weight behind fintech companies. In 2020, fintech investment in the US reached $22 billion in the US, and $4.1 billion in the UK. Global fintech market value is predicted to reach $309 billion by 2022.
Jeppe Rindom and Niccolo Perra were inspired by the same idea of transparency and trust that had propelled the fintech revolution. As CFO of Silicon Valley cloud startup Tradeshift, Jeppe knew all too well the trials and tribulations of internal and external company finances. Harking back to the very first piece of fintech—the credit card—he wanted to create a new card that could empower employees and democratise company finances. Pleo was born.
Pleo has almost invented its own category within fintech—’expensetech’. It's a business spending platform, which provides each employee with their own virtual or plastic card for company expenses which is coupled to an app. The idea is to remove the frustrating paper-based expense system which remains a burden for both employees and CFOs alike. Pleo automatically categorises spending, captures receipts, and automates bookkeeping tasks.
Launched in 2015 in Denmark, Pleo is already replicating success in the UK, Spain, Germany, Sweden, and Ireland. They’ve raised nearly $80 million to date, most recently in a $56 million Series B round in 2019, with plans to raise a $100 million Series C round this summer.
Excerpted below, Jeppe Rindom, Pleo’s co-founder and CEO, unpacks some of the most important lessons that he’s learned through building what is now one of Europe’s biggest fintech startups. These include:
Your mission and values should drive your product
Listen to your customers, but stick with your own solutions
Raise funds before you need to
Culture needs to be clearly defined in a large, distributed company
There is a formula for expanding into new markets
You can watch the full, unedited, fireside chat with Jeppe here, hosted by Factory's CFO Emma-Jane Willan.
Learning 1: Your mission and values should drive your product
Nico (my co-founder) and I really wanted to create a product that would help employees feel valued at work. We saw alarming statistics about how much of the global workforce is disengaged at work—around 85%. If nearly 9 out of 10 people are unsatisfied in their jobs, that’s not just a massive social problem, it’s a massive business problem too.
Drawing on my own experience as CFO at Tradeshift, I knew some of the pain points of internal office expenses. The first option is you give people access to the company card. I personally tried to empower people to buy what they needed, but it becomes difficult sharing one company card with the whole team, and trying to reconcile everything.
Alternatively, you let people pay for things themselves, and claim it back. But there’s a kind of awkwardness that comes with making people pay out of pocket, file receipts, log everything into spreadsheets, and then wait for reimbursement.
Pleo was originally intended to save money and time through automating all of these internal finances and expenses. But soon it became symbolic of a certain culture you had in a company. We wanted organisations to move away from this painful process of paying out of pocket, towards something that was not only smoother, but also inspired trust in people.
“Pleo was originally intended to save money and time. But soon it became symbolic of a certain culture you had in a company.”
This mission definitely feeds down from our team into our product. We’ve always been drawn to people with entrepreneurial instincts, who make their own decisions and have autonomy. This has clearly developed into a product that empowers employees to feel the same way.
We always like to say, Pleo turns CFOs into heroes. You don't want to be that CFO that spends their whole time chasing everyone for receipts. We’ve actually started to realise that companies underline the fact that they use Pleo as a recruitment point. It’s like they want to show what sort of company they are. There’s certainly something to this.
It may feel too early to set a vision and mission, but with multiple stakeholders (e.g. larger team, investors) it’s all too often that everyone has a slightly different view of what’s the goal and what should be prioritised to get there. Your vision and mission are the foundations for your strategy and wider objectives.
Learning 2: Listen to your customers, but stick to your own solutions
Because of regulation and licensing, Pleo’s lead time from ideation to launch took a lot longer than we thought it would: around a year to 14 months.
It was really important to us that we used that time wisely. Customer outreach, and engaging with our users, was a big part of this. I’m a big believer that you have to understand your customers deeply in order to make sure that the solution you have works, and resonates with what customers are looking for.
There were several things we tried during this time, including trying several different price points and warming up the pipeline of prospective customers before we were ready to launch.
I learned that you should never actually build what they ask for. This is particularly true for a financial product, where customers will vary so much on the actual problem. If you listen directly to what they ask for, then you’ll find it difficult to innovate. You need to understand what they’re saying, but still be creative enough to invent something that's a leap jump from what they might expect.
Understand their pain, but don’t listen to their solutions.
“Be creative enough to invent something that's a leap jump from what [customers] might expect. “
Top advice for using customer feedback:
Search your archive of customer service requests to see what long term problems are.
Keep asking for feedback on a regular basis
Create a customer advisory board
Add feedback to the product building process
Follow feedback where possible—but don’t be afraid to say no.
Learning 3: Raise funds before you need to
Advice often differs on when you should raise funds. Some founders argue that you should stretch initial capital as far as possible, so that you then raise when you have a clear idea of what you really need the investment for.
We actually always raised funds earlier than anticipated, usually around six months before most companies might have. Some might say this was a conservative approach, but it’s always worked for us - we can keep moving ahead at full speed, with less worry that we’re going to run out of cash.
When you are starting to raise funds, I’ve learned that there are two very important things to think about.
First of all, think about the completeness of the team. Do you have the right talent in the right areas? Are you missing anyone critical? Secondly, think about the problem you are addressing. Is the market big enough? Is your vision clearly defined and, more importantly, appropriate?
If those two things are there, then there's a good chance you can raise money. I’ve seen great teams fail because their vision isn't bold or big enough, and vice versa—great ambitions, poor teams.
Learning 4: Culture needs to be clearly defined in a large, distributed company
In the early days of a startup, culture develops organically. At Pleo, we hired people we liked and who we believed in. Without making it explicit, or writing it down anywhere, our culture started to form.
In these environments, organisations can really be led by the culture of the team. With everyone in the same room, you almost don’t need to say things explicitly: your mission just runs through the organisation. Every discussion you have has this underlying joint mission, this sense of the place you’re all going together.
Over the past five years, we’ve seen Pleo grow from just a few employees in one office to around 300 people spread around the world. In a company this large and this distributed, don't think you can keep running your company just through this organic culture. You may share the same values, but the way you interpret those values might be different.
I was slow to come around to the idea of remote working. We first became distributed when one of my engineers recommended hiring a former colleague of his who was based in Canada. I quickly learned that, if you hire one person remotely, then you’re a remote workforce. You have to go all-in, otherwise that one relationship isn't successful. As soon as we first opened our office in London, it was an important lesson for us to embed remote-first ideas into our culture, so that people are extremely respectful of those who aren’t in the same office as you. This included:
Doing whole team meetings after 2PM (to factor in all timezones)
Integrating communication tools like Slack and Zoom
Introducing Zoom screens in the office, so that you can easily speak directly to people who are working remotely
Throughout this, I learned that your company culture needs to be reinforced with structure. We’re starting to work with objectives and key results (OKRs), we’re more disciplined about how we talk about our vision and mission, and we really explain what that means in the day-to-day for everyone. We talk about strategy, and how that's linked to vision and mission, so that each person can know how they are contributing to this.
Learning 5: There is a formula for expanding into new markets
Even before the product had successfully taken off in Denmark, we were already thinking about the future possibilities of expanding into new markets. Fintech companies like Pleo have the capability to expand quickly across different countries and continents—but they come with a whole package of considerations.
We learned that there’s actually a formula for selecting the right market to expand into. Our launch team created a methodology of criteria that we’d need to evaluate for new countries, in order to determine whether launching was both achievable and worth our time. Criteria included:
The size of the market - the population, in particular the size of the target audience
The competitor landscape - where there other products or companies doing something similar who we’d have to compete with? If there weren’t, then why wasn’t anyone doing something similar?
Product options - what would we need to offer specifically to that market, and how easy would that be to deliver?
Team - do we have people on board in that country already, or would we need to recruit?
Fundraising - do we have enough capital to fund the launch? How easy would it be to raise capital there?
The UK was actually the first new market we launched into. For us, launching in the UK was incredibly important, both from a strategic point of view but also in terms of what we could achieve. For fintech businesses, the UK is the toughest market from a maturity level, and we knew it would be an incredible challenge. But if we could do it successfully, this would prove to investors that our product was sound and had great potential.
👋 Connect with me on LinkedIn if I can answer any questions.
Jeppe co-founded Pleo.io in early 2015 where he’s the CEO.
Jeppe has been noted as one of the top 100 most influential people in tech in the Nordics.
Having graduated from Copenhagen Business School, with a Master’s degree in Finance & Accounting, and from there working for the likes of McKinsey, Carnegie, FIH Partners, Chr. Hansen etc. Jeppe is a highly experienced finance professional.
Jeppe is also an angel investor in multiple start-ups in Europe and the US, primarily focusing on Fintech and Business Software.
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