Online welath management service Indexa Capital is launching today. The company has received with the financial support of Cabiedes and other investors.
Robo-advisors, also known as online wealth management services, are on the rise. The combination of low interest rates, high commissions from banks and low returns from other investment vehicles, means fertile territory for fintech startups willing to manage -and increase- people’s savings through technology.
US-based Wealthfront was one of the first startups to disrupt the sector. The company has raised more than $129 million from multiple VCs and currently has $2 billion in assets under management.
Spain lacked a service of such characteristics, with the only example being London-based ETFmatic, co-founded by the Spaniard Luis Rivera.
Led by Unai Ansejo Barra, François Derbaix and Ramón Blanco, Indexa Capital is now joining the field, with an initial investment of more than €1 million from Cabiedes & Partners, Fides Capital, Viriditas Ventures (Yago Arbelos), Derbaix, his wife Marta Esteve (Soysuper, Rental) and Álvaro Ortiz.
The Madrid startup is launching today, promising better returns for investors willing to give the company at least €10,000. Derbaix and Ansejo had previously founded Bewa7er, a secondary market for company’s shares that was put on hold weeks after its launch.
Indexa Capital, Wealthfront and similar companies in the sector enable clients to invest their money on a monthly basis in a diversified portfolio of index funds. The service competes with traditional investment services offered by banks, but promises much lower commissions (0.79% annually vs. 3.40% at banks, according to Indexa), automated processes, better returns and more transparency. Indexa says that it expects to offer its clients annual returns 3.1% higher than banks.
To know more about ETFs and index funds, read this article from Samuel Gil, where he explains the great opportunity for automated wealth management services. “Robo-Advisors”, he says, “pretend to offer a fully only service as good (or better) than the one provided by traditional advisors, at a much lower cost and with smaller investment requirements. Good, pretty and cheap. And for the masses”. Derbaix has also written about the project here.
Wallapop CEO Agustin Gomez appeared on stage at TechCrunch Disrupt to talk about fundraising, TV ads and the startup’s first acquisition.
Not often do we get to see Wallapop’s founding team at a conference or on stage. Well, that’s not exactly true. Miguel Vicente and Gerard Olive, two of the app’s co-founders, have often appeared at conferences to talk about the startup. But its CEO and the person who runs the company on a daily basis, Agustin Gomez, has kept a low profile since Wallapop’s inception.
This, however, changed this week when Agustin appeared at TechCrunch Disrupt and was interviewed on stage by Natasha Lomas. He did not say anything about the company that was unknown, but he did comment on a few topics that I’ve covered over the past few months on this very same blog.
No value in talking about fundraising or valuation
Wallapop has never been willing to talk in public about the amount of money they’ve raised, who they’ve raised it from or what their plans are for the near future.
We have it on good authority that the Barcelona-based startup has raised more than $140 million from Fidelity, Insight Venture Partners, Accel Partners, Northzone VC or Vostok. However, Agustin Gomez once again declined to talk in detail about the topic; which is totally understandable from the startup’s point of view.
“A long time ago we thought there was no upside to talking about fundraising, we never comment, we keep a very low profile. This is a personal point of view, the only ones interested in how much money we have in the bank are our competitors. I don’t see any upside about talking about financial raising. We focus our communications and PR in topics that are interesting.”
The press seems quite obsessed these days about turning startups into unicorns (private companies that reach a $1 billion valuation), as if that meant much in the grand scheme of things. TechCrunch was the first to mention in May that Wallapop could be on its way to reach that status.
This is what Agustin had to say about the topic and the nonsense talk about this or that startup becoming a unicorn.
“Something that in Wallapop we have control over quite well is never speculating with the valuation of the company. A lot of people get mad — they think the company is better if it has a higher valuation. But when you think in the long term, especially in the classifieds industry where it takes years to take the market, you have to manage your valuation and be very coherent.”
Wallapop as a TV driven company
In the past we’ve mentioned the now famous TV ads Wallapop has produced, both in the US and in Spain.
With no monetisation strategy in place, Wallapop continues to be focused on increasing its user base and finding a right balance of buyers and sellers for its marketplace to improve over time.
Asked about the company’s marketing strategy, Agustin claimed that Wallapop is a “TV driven company”.
“We’ve learned a lot about how to combine traditional TV marketing channels with a huge digital strategy”, he said. “TV still works”.
“This is something that I can officially announce. Wallapop’s main objective is to expand our business in the US”, Agustin said. “We started talking with Fabrice Grinda, who six months ago launched Sell It, and since we were looking to create a strong team in the US, we talked about joining forces. We share the same vision about this new category and the deal happened very quickly. I’m now really happy to have Fabrice on our side and he’s going to help us expand our business in the US”.
Ad technology startup Marfeel has named Jennifer L. Wong to the company’s board of directors. Wong is the current Chief Business Officer of PopSugar and will come in handy in the company’s US expansion.
Slowly but surely, Marfeel’s US expansion continues. The Barcelona-based ad technology startup has named Jennifer L. Wong to the company’s board of directors. Wong is the current Chief Business Officer of PopSugar -one of the biggest lifestyle and gossip online properties in the world- and she previously worked at AOL in various senior executive roles and at McKinsey.
In other words, she knows the industry inside out and she’ll probably come in handy for Marfeel in its objective of winning more clients in the US.
Mafeel’s technology allows publishers to create a mobile-friendly version of their sites while managing their ad inventory. The company claims that it reaches more than 150 million readers on a monthly basis.
Juan Margenat and Xavi Beumala, co-founders of Marfeel, have said numerous times that in order to become an even bigger company they must do well in the US, and they’ve previously announced big plans for the country, which include opening an office in New York City and building a sales and marketing team dedicated to American publications.
At PopSugar, Wong leads business operations, biz dev and growth strategy across all content and commerce platforms. PopSugar is not just a digital publication, and the conglomerate includes sister ecommerce site ShopStyle.com, which has an audience of 18 million monthly shoppers and drives $1 billion in gross sales to its partners. All PopSugar sites combined reach 85 million visitors worldwide.
“I’m very pleased to join the Marfeel Board of Directors,” Wong said in a statement. “Global mobile engagement and monetisation is critical and Marfeel has developed leading technology which enables dynamic content and ad rendering. Having worked with Marfeel on the client side, I’ve had an opportunity to see how their solution can benefit publishers in terms of traffic, engagement, and revenue.”
In an email conversation, Juan Margenat told me that they expect Wong’s appointment to be huge for the company. “It’s a way of ratifying our technology and business model”, he said. Marfeel started off as a pure SaaS technology startup, but soon pivoted to focus on managing publishers’ ad inventory. “Wong is also in New York, which will definitely help us in our objective of conquering the US”.
Wong will join Margenat, Beumala, Jordi Viñas (Nauta Capital), Xavier Lazarus (Elaia Partners) and Urs Cette (BDMI) in Marfeel’s board of directors. The company raised a $3.5 million Series B round less than two months ago.
beBee affinity network is a Madrid-based startup that is a mix of LinkedIn and Google+ communities: the company claims to have raised more than $11 million.
I was calmly browsing the web a few days ago when an email appeared in my filled inbox. The subject was “beBee Social Network Startup”, and in the body of the email a nice communications person suggested that I should write an article about the company with the following headline: “9 million users in 9 months and an $11 million injection into beBee”.
My first reaction was ’screw it’. I hate being told by PR people or startups themselves what the headlines of my articles should be, but I have to admit that those figures did indeed call my attention. Did such a startup exist? Was beBee a real thing? Did they really amass those numbers in such a short period of time?
Well, it seems that the answer to all of those questions is yes. But, as Internet history has previously shown, numbers are just numbers and there are many ways of reaching them.
beBee defines itself as a social platform that connects people based on their interests and hobbies. What they like to call an ‘affinity networking’. In practise, beBee is like the child of LinkedIn and and other interest-based platforms such as Google+ communities.
Once you sign up you’re asked to complete your profile with your professional background and also with what really interests you, be it technology, sports or cooking. beBee then establishes connections between you and other similar folks through communities.
It’s not something really impressive or that hasn’t been seen before. The most interesting aspect about the Madrid-based and 50-person startup is where it comes from.
Canalmail, one of Spain’s biggest technology exits?
“We want beBee to be a 50% professional and 50% entertainment network”, co-founder Javier Cámara told me in a phone interview. “Well, perhaps we want the professional aspect to be a bit more important in the near future”.
Javier Cámara is not new to the game, and neither is his co-founder Juan Imaz. Imaz founded Mixmail, the first free web based email service in Spanish, in 1996. Three years later, right before the burst of the dotcom bubble, he sold the company to Ya.com.
One year later, in June 2000, both Imaz and Cámara (a former employee of Oracle in Spain) founded email marketing startup Canalmail, which would end up becoming one of the largest technology exits in the history of Spain; at least according to sources.
In 2007 the company had reached €11 million in revenue and a positive EBITDA. According to data from Dato Capital, Canalmail posted revenue of between €1.5 to €3 million in 2014, far from its heydays.
So, if beBee had indeed raised $11 million pre-launch from its co-founders and investors such as Eduardo Diez Hochleitner (former CEO of PRISA Group), Enrique de la Rica (Dean of the business school ESEUNE) and Julio Bueso (founder of Web Financial Group)… where did all that money come from?
According to sources close to the company, Canalmail was sold for much more than that: €60 million. “It was never reported in the press, but VSS actually acquired 60% of the company for €60 million”, this source says. “If I’m not mistaken, this represents one of the bigger exits in Spain’s technology history”.
Canalmail’s co-founders did not comment on this and I’ve yet to find any reports in the media detailing the €60 million acquisition. To get confirmation, I’ve also reached out to VSS, but have yet to hear back from them.
Job portals that would end up becoming beBee
Following the exit, Cámara and Imaz decided to focus on building professional and vertical networks to help people find jobs. “We made quite some money with the deal and in the next few years we focused on buying great domains and on building a professional network”, Cámara explains.
Job portals such as informaticos.com or ingenieros.com would end up becoming what is now known as beBee. “In the summer of 2014 we decided to unify all of those portals under one brand, beBee”, the company says. “A network where you only see what really interests you”.
By taking advantage of its origins, beBee started off with a database of more than 1 million users. This took place in February 2015, and the company now says that it has more than 9 million in Spain and Latam.
“We’re growing very fast and we want to reach 40 to 50 million users in the next couple of years”, Cámara explains. “We’re currently focused on Spanish, Portuguese and English users. In the future we’d also like to launch in the US, but only if we’re able to raise a large round (€30 million or so) in America”.
The company says that more than 4 million people actually use the network on a monthly basis and that it makes money through targeted advertising. “Brands love the possibility of targeting very specific audiences. For example, engineers based in Madrid who are also into running”, Cámara comments.
A few days ago, I asked on Twitter about beBee, to see if any of my followers were users of the site. I only received one response from beBee’s Twitter profile, saying that they had more than 9 million users. The tweet, which has now been deleted, included this image.
Asked about the “company’s value”, a beBee spokesperson said that “it is the valuation calculated by the value per user. The value includes the data, interaction and sharing of information, what the information is worth to beBee, our advertisers and our investors, and the value includes additional confidential info”.
If the data is indeed true, the average beBee user is worth $40. More than each Twitch, Instagram or Dropbox user and about the same as a Whatsapper and half of a Twitter user.
Guest post by Rodrigo Martinez of Point Nine Capital describing 15 lessons from the top CTOs and startups in Spain.
Guest post: This post was written by Rodrigo Martinez, a Spanish early stage investor at Berlin-based VC firm Point Nine Capital.
For those who don’t know us, Point Nine Capital is an early stage investor based in Berlin. So far, we only have one investment in Spain – we invested in Typeform when they had 20,000 signups and no revenue.
At this stage, we know that the founders will face a steep learning curve. Our goal is to be their best partner and to provide close support. But we don’t have answers to all the questions, so connecting them with our portfolio and network is a key way we try to help them grow.
As I mentioned in a previous article, in Spain there are very promising developments. However, the ecosystem is still young and fragmented between Madrid and Barcelona. Probably because of that, there’s a lack of communication between the key players and the lessons learned are not spread quickly enough.
Business founders are still somehow connected, but the challenge for CTOs here is even higher.
Therefore, we decided to put together a meetup for the top startups and tech’s CTOs in Spain that we could reach out to. On Friday November 27, more than 80 CTOs and VPs at some of the most well-known startups in Spain joined us to discuss the lessons they are learning while building successful products and teams.
Here I will summarize some of the key messages, with the hope that these will also be helpful to other CTOs who could not join us – you can also follow some of them on Twitter.
5 tips to scale teams
Invest in people, that’s the answer to all problems: some common practices we heard of are to allow teams to spend time learning, to not forget about showing appreciation for jobs well done, to coach people, to always keep hiring in competitive roles, etc.
Define company values: that might sound like corporate bullshit to most engineers, but it helps to get to faster decision making and it allows you to be aligned on your decisions when you have a larger team.
Create a hiring brand: everybody mentioned that hiring tech talent is very hard. You need to make yourself attractive to developers – and the answers shouldn’t be only cash. The companies that struggled less to hire developers used their employees as their best ambassadors. We also learned that a hard hiring process attracted talented engineers at the early days of Tuenti.
Define the right incentives: when companies grow, the challenges to manage diversity will start to kick in. An employee in his 20s will probably be more focused on the upside (thus training, equity, etc are good tools to remunerate), while somebody in his 40s will look for balance (family time, cash to pay mortgage/schools, etc). On a not so positive note, it’s important to highlight that I couldn’t find a single female CTO to join us. There’s a big problem with diversity in our industry.
Good communication will only get more challenging: as the leader on the team, you need to make sure that you set processes to get fluent communication – 1 on 1s are mandatory, make sure you spend time with that.
Some other cool initiatives: a manager has every day a 9:30 coffee with a different employee. One year later, he has spoken several times and in private with all of his employees. Another company organized volunteer blindlunches, so people from different departments get to know how other areas work.
Bonus: Hire from tuenti, apparently that’s what everybody does.
5 tips to scale technology
Invest in people, that’s also the answer here.
“Tech is a team sport, no space for rock stars” – John Carbajal, CTOat @ Kantox.
Optimize for speed of development – don’t over-scale: solve problems as they appear, but invest early in monitoring -not only when issues happen- so it gets less messy to identify the sources of problems and to solve them.
Build vs buy: think about the cost of building AND maintaining a feature in terms of engineering hours. Focus only on what’s core for your product and don’t reinvent the wheel – ie. some people even outsourced database management.
Mobile is still very early: it’s hard to support all different platforms, versions, screen sizes, etc. You will have to make decisions on when to stop. There are also plenty of new challenges that you don’t have on the web – like doing proper QA in mobile is hard, due to the fact that virtualization doesn’t give you the same feeling; some people do QA in the elevator.
Bonus: build relationships with Apple, you might need them to release a new version under preasure.
5 tips to scale processes
Set the right priority: you have to choose if you accept growing fast AND breaking up things – you can’t be fast without breaking things.
Be lean, test a lot, measure and iterate: after customers ask for it, first do a basic MVP for them, then validate if the metrics prove the case. After that, in the next iteration, spend time building a more solid product. Also, remember to kill stuff you don’t use!
“MRR is THE metric, but hard to translate into developers’ priorities. We focus on customer engagement as a proxy” – Jordi Romero, CTO @ Redbooth
Understand who drives product, make sure they listen to customers: there’s no common answer if product should be inside or outside the tech organization, but it’s important to know how you get customers’ feedback in the product cycle – somebody has to speak with customers!
Make clear rules to prioritize jobs: bugs-first? when is a bug a top priority? when do you refactor? when is it done? or ‘done done’?
“When something is ‘done’ is different in different countries, learn about it! In some countries in Latam, you might need to add 4 days to get into the stage of ‘done’ in US,” – Joan Villalta, VP @ Scytl
Follow best practices in mature processes: allow one click test-and-deploy, test to make users happy, try to avoid developers messing directly with servers, etc.
I want to use the final words to thank everybody involved: the attendees were very engaged which enriched a lot of the conversations. There was a huge amount of talent in the panels, but no less sitting in the audience. Spanish investors were very helpful in introducing us to their CTOs; it’s hard to attract +80 CTOs without their help. Oh, and also without Caixa Capital Risc, AWS, Wayra and MWC we wouldn’t have had a venue, food and beers 🙂
Spain is one of the first countries (outside of Germany and Austria) where baking startup Number26 has launched its services. Here’s what they offer and how you can open a new bank account with them.
Number26, the German startup that offers a new and fully digital banking experience, is now available in Spain.
The startup, which sits on top and uses the banking license of an official financial institution named Wirecard, is looking to differentiate itself from competitors in two areas: in terms of design and usability and in how easy it is to create a new account.
The experience it offers is mobile-centric and after registration, which is done via browser or app and after showing our face and passport to a German representative, consumers will receive a MasterCard debit card in 3 to 4 business days.
Once received, you’ll be able to withdraw cash from any Spanish ATMs and send and receive money to any European bank account, with no fees attached.
Asked about this, a Number26 representative told us that “we will not charge fees for withdrawing money at any ATMs, however there is a really small percentage worldwide where ATMs themselves charge fees”. If this happens, the company says, “we recommend to cancel the transaction and find the next ATM”. This applies to any ATM in Europe.
In terms of receiving and sending money from/to other bank accounts, Number26 claims that it’s “free of charge to your account” within Europe. That means that if your bank charges any fees when receiving money from any account, that is out of Number26’s control.
Expanding in countries with “old banking technologies”
The company, which has been operating in its home country for almost a year, has launched simultaneously in France, Greece, Ireland, Italy, Slovakia and España.
Number26 says that these countries were selected as the first step in the company’s expansion because they “rely on old banking technologies and an expensive infrastructure”. As a result, the company says, they “believe that there is a higher demand for our mobile first bank account”.
The company is working on a Spanish version of its site and mobile apps, which we guess it will be key in Number26’s adoption in Spain. Customer support is also done from Germany and in English, and Spanish consumers won’t have the option of visiting any physical bank branch for other customer support issues they might encounter.
Besides the usual features most banks provide these days (such as push notifications or SMS when any translation takes place), Number26 offers features such as MoneyBeam (to send money to friends), the ability of withdrawing and making cash deposits at thousands of grocery stores (only in Germany) or flexible overdraft levels.
The startup, which claims to have 80,000 clients in Germany and Austria, also promises to integrate other financial products into its app in the near future, such credit, savings or insurance products.
Captio is an expense reporting startup that has built a big business selling only to Spanish companies, having just reached an MRR of €80,000.
Tracking expenses is a pain in the ass. And it it’s so for a freelancer like myself, I can’t imagine what it feels like for multinationals and big companies. Joel Vicient saw the same problem more than 10 years ago and he decided to tackle it.
“A decade ago I started a technology consulting firm in Tarragona, and I quickly saw that tracking expenses, invoices and other forms bureaucracy was a waste of time”, he recently told me in a phone conversation.
Those were the origins of Captio, a Catalan startup co-founded by Vicient, Joaquin Segura, Lluís Claramonte and Dan Moser, that has grown significantly over the past few years thanks to the OCR (Optical Character Recognition) technology built in-house.
The company, under the name Ongest, participated in one of SeedRocket’s first editions (2009) but quickly saw that what they had built needed a new focus. “The first product, which extracted relevant data from invoices and expenses using scanners, was aimed at accountants and was desktop-oriented”, he says. “We did ok, but it wasn’t interesting for us or for investors in terms of growth and scalability”.
At the time, smartphones were increasingly becoming a force in the world of technology and apps were starting to be a thing, which pushed the company to transform its product and focus exclusively on mobile phones. On top of that, Vicient recognises that “the way accountants work is exclusive to Spain, but tracking tickets and expenses is a global problem for companies all around the world”.
“We took the technology we had built and we applied it to the smartphone”, he adds. It was 2012 and the OCR system they had built, combined with semantic technologies, were the beginning of a new phase for the Tarragona-based startup.
Captio: profitable, €80K MRR and 40K MAU
Captio’s apps allow employees to simply submit expenses to their employers by taking photos of tickets or invoices. The startup establishes a direct connection with their client’s finance departments to update their expense tracking software in real-time and with the official Spanish tax agency, thus avoiding tickets being lost, administrative mistakes and fraud.
The approach to solving this simple problem is working well for Captio. Vicient admits that they’ve been growing at rates of more than 300% over the past few years on various fronts (revenue, tickets scanned, active users) and that more than 40,000 people use the app on a monthly basis.
“Managing this kind of growth is tough for a small company”, he says. “We had 10,000 users in January and we’ve been growing at 15-20% every month. This means that growth needs to increase accordingly in various areas that might not have been obvious before, like product, sales or human resources”.
Captio has grown from 15 employees in early 2015 to 50.
While the company declines to discuss specific revenue metrics, I’ve heard from sources that its monthly recurring revenue (MRR) stands at €80,000, which is significant given the fact that Captio is currently only available in Spain. “Expanding internationally is our next big challenge”, Vicient admits. Telefonica, BBVA, Carrefour, Bankinter or Olympus are some of their biggest clients.
According to the Spanish official registry, Captio had about €1 million in revenue in 2014 and was profitable.
Captio has raised more than €2.3 million from Kibo Ventures, Bankinter, THCAP and business angels such as Carlos Domingo, Carlos Blanco or Juan Margenat. “A few years ago, when we told investors that we were building accounting software, they didn’t pay much attention to us. These days, when we mention that we’re a fintech startup, their eyes widen”, he concludes.
The joy, I guess, of being in one of the hottest technology sectors right now.
EsLife, the Valencia-based and home cleaning startup, is shutting down as a result of a labour inspection conducted by Spanish authorities.
EsLife, the Valencia-based home cleaning startup, is shutting down. The company officially announced it on its blog yesterday, simply saying that EsLife would no longer be offering its services to its customers.
“Today, November 30 2015, EsLife will stop working”, reads the blog post.
The announcement doesn’t mention why the company is shutting down, but I’ve heard from multiple sources that it is as a consequence of a labour inspection from Spanish authorities that took place earlier this year.
Following the appearance of the first rumours regarding EsLife’s legal situation, I contacted co-founder and CEO Richard Gracia in October and he told me that they had yet to make a decision regarding the company’s future. At the time he said that they were studying the options they had.
Home cleaning startups, and many other similar marketplaces where the supply side is made of professional (or not) workers, currently face legal uncertainty. It’s not yet clear whether the cleaners need to be employees of the companies acting as intermediaries (EsLife in this case) or if simply being autónomos (fully legal freelancers) is sufficient.
Will EsLife’s competitors be affected by this?
When I first talked to EsLife a year ago, Gracia said that EsLife couldn’t force cleaners to pay social security contributions or be legally self-employed. “However, we do everything we can to try to achieve this”, he said.
The company is not disclosing the nature of the labour inspection it faced a couple of months ago, but it seems as if was the definitive nail in EsLife’s coffin.
EsLife had raised €740,000 from various accelerators and funds, including Lanzadera, Plug and Play Spain and Angels Capital, Juan Roig’s (Mercadona) investment vehicle. The company had also received €50,000 from public institution ENISA.
According to its CEO, EsLife was very close to raising an additional €2 million from investors.
Asked about why he thought EsLife was targeted first by Spanish authorities, instead of competitors GetYourHero or Wayook, Gracia told me that it was due to his company being the “biggest one in the market”. “We had thousand of clients in multiple cities in Spain, he said.
He also added that he didn’t believe there were many significant differences between EsLife’s way of working and that of GetYourHero or Wayook, leaving the door open to more inspections and, thus, uncertainty in the home cleaning sector. GetYourHero and Wayook claim to only work with fully legal workers.
Are Spanish traditional banks making life difficult for fintech startups and its clients on purpose? How are they doing this? Philippe Gelis responds to these questions.
This is a guest post written by Philippe Gelis, CEO and co-founder of fintech and FX startup Kantox.
Day after day, when I explain what we do at Kantox, people ask me, “Banks are your enemies, then?” and I always reply: “Are we their enemy?”. We don’t consider banks as enemies. However, without any doubt, Kantox came about as an alternative to the bad practices of the oligopoly of traditional banking and its clientele abuse.
There is a relationship of competition-collaboration that, given the latest twists of the big financial companies, looks increasingly moving in the direction of collaboration. Perhaps, it is yet another example of the saying, “if you can’t beat your enemy, then join them”.
When the fintech phenomenon arose, banks laughed at us. We were some crazy insignificant people, waving the flag of transparency and armed with technology, fighting back against an archaic sector, more powerful than most governments. When their customers, the same people who they had rewarded with hidden commissions and with a good dose of the status quo, began trusting and recommending us, only then did they start paying attention to us. They began by criticising our model and tried to discredit us, but the fintech wave had already begun.
Recently, a banker wrote to me, saying:
“I fully agree with the analysis that Kantox makes of the financial sector and its future trends, although I have to admit that I was wrong about Kantox in 2013, thinking that it was just a good idea with an irrelevant market share, if it even managed to last the first year. Actually, my prediction was that, in the best of scenarios, it would be an ant compared to the elephants of banking. However, you have transformed into a mouse that terrifies those elephants, and now you are ready to take the next step and transform into hunters who overcome banking elephants, thanks to technology and intelligence, despite a smaller size. I wish to participate in this revolutionary task and, maybe, this will lead us in some years to see a fintech bank.”
These days some of our competitors fear us, but some are sufficiently clever to build bridges and to try to redefine themselves, collaborating with fintech startups and creating a constructive ecossystem for both parties. The first beneficiaries of this strategy are customers.
Spanner in the works
A couple of years ago, some UK banks tried to halt the establishment of P2P lending companies in the country. They slowed down the administrative procedures to paralyse the credit procedure of their customers. Now, we are seeing the same thing in Spain. This is what we are facing:
Bundling of products: Traditional banks threaten their clients with cutting their credit if they use a fintech company for other services. For example, in some cases, they link export credit with currency exchange and won’t accept that the part related to the currency is conducted by a fintech company when they give them credit. Curiously, these threats never end up being carried out. I pause here for a brief legal point: bundling of products is illegal, so I invite all those companies that experience the same thing themselves to report it to consumer associations and the European Commission (we can help on that).
Discrediting fintech: The reasoning? They state that it is “risky” to work with a small company, which makes me ask myself if they also consider it “risky” to offer mortgages in foreign currencies to families who end up bankrupt, or shares (“preferentes”) to elderly people or those without any financial knowledge who end up losing all their savings.
Closing fintech company accounts: One Catalonian bank in particular once decided to close all the bank accounts of all the fintech companies that were their clients under the pretext that “their operations don’t fit with us”. Strange… I’ll let you guess what bank I am speaking about.
Refusing to transfer funds to fintech companies: At the time of exchanging currency, for example, the customer receives communication from the bank saying that “we cannot sendfunds to Kantox”. That is false, and a way of convincing customers who do not know how operations are conducted.
Using dumb excuses: Banks are also very good at making mistakes on purpose and using dumb excuses to justify them. Examples: “Sorry, I did not understand you wanted to use Kantox so I already exchanged your USD into EUR… (with a huge spread)”, “I forgot to send the funds to Kantox, I did not remember you said it was urgent…”. What I love the most about cases like this is when customers feel empowered and decide the switch to another bank or ask for a full refund.
In some cases, these practices are not decisions coming from the bank, but from personal or account managers of their branches, who decide individually –and surely motivated by commercial pressure– to be “clever” in the way that they make their clients “loyal”.
Moreover, we know that some banks have implemented systems to alert and detect transactions conducted by fintech companies. This is financial intelligence in the purest NSA form.
We know that some banks have implemented systems to alert and detect transactions conducted by fintech companies.
Its tempting to share with you the list of banks or their client victims of these practices, but I will attempt to contain myself… for now. However, internally we do keep a ranking of bad practices of those entities that treat their clients the worst – and they make our marketing better, I have to say.
It is gratifying to see that there are less and less customers who allow themselves to be swayed by their managers –yes, the same ones who for years have misled them with opaque and unfair commissions. The head of currency of a large Spanish bank once told me, over coffee in a Starbucks, that “customers don’t need to understand the products and their real cost”. Yet another reason to keep working as we do at Kantox.
We could share these bad practices with the Bank of Spain, consumer associations or the European Commission as well as the press –who try and insist that we reveal exact cases–, but I consider it more productive and motivating to show that not all banks are like that. At least in the rest of Europe.
Smart banking Vs Cosmetic banking
There are banks that embrace fintech. Arkea, in France, positions itself as the bank for fintech, providing them with the necessary banking services for their operations, like segregated accounts or payment system. They have converted this collaboration into part of their positioning. They invest in fintech companies like Pret d’Union. They buy others like Leetchi. They collaborate with Compte Nickel. This is a clear case of “smart banking”. Even more surprising, they do it in their local market without fear of cannibalizing themselves.
In contrast, we find those entities that set up fintech incubators or hackathons; venture capital funds to invest in fintech; and other marketing operations of what I refer to as “cosmetic banking”.
The headlines are more alluring than in the tabloids, but if they really do want to join the fintech bandwagon and have a future, these banks are going to have to reinvent themselves, change their DNA and be brave. Cosmetic surgery is a form of deceit that only satisfies someone for a few more years…
Analysis of Jobandtalent’s history and business model, as the company wants to implement a transactional model in the job market.
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With more than $40 million, job matching startup Jobandtalent has become one of the richest Spanish startups. Richest in terms of funding, because many in the country continue to question whether the company has a good enough product or business to justify that number.
Given the fact that there’s no better way to find out than asking the company itself, I recently took a trip to number 93 at Paseo de la Castellana to sit down with co-founder and co-CEO Juan Urdiales. We talked about the past, present and future of the company.
Before doing that, I took a look at Jobandtalent’s financials at the Spanish official registry. Those filings, provided by Dato Capital, show that the company had sales of €1 million in 2014, up from €768,000 in the previous year. A moderate increase in revenue that was accompanied by a much bigger surge in its loss, as the company co-founded by Urdiales and Felipe Navío posted a loss of €2.5 million last year, 7.5 times more than in 2013.
Jobandtalent in 2014: revenue of €1 million, financial loss of €2.5 million
Since then, the same question about Jobandtalent remains: how the heck does the company make money?
The origins of Jobandtalent
As we start talking about the current state of the company, Urdiales quickly explains where the company comes from, as if knowing Jobandtalent’s past would make it easier to understand its present and future.
The first conversations about the job market took place in 2008, when Felipe Navío was working at Tuenti and few months after Urdiales sold its first startup, online clothing store Pluscuamperfecto. “I tried to raise capital for Pluscuamperfecto, but at the time I did not realise it wasn’t an attractive business for investors”, he says. “One day I talked to Felipe about how tough it was for some people to find a job and how we could make it easier, and those first conversations where the origin of Jobandtalent”.
Felipe left Tuenti soon after and Tuenti co-founder Adeyemi Ajao helped build the foundation of the company. Ajao was about to start an MBA at Stanford, but had to wait a few months for the program to start, so he decided to help. “He didn’t invest capital in the company, but he did help us a lot in the fundraising process and in the recruitment of JT’s first developers”.
Urdiales was good friends with Tuenti’s co-founders Adeyemi Ajao, Felix Ruiz and Zaryn Dentzel, and there’s no doubt that this close relationship helped the startup in its beginnings.
When asked about Jobandtalent’s founding team, Urdiales names himself, Felipe Navío, Adeyemi, Tabi Vicuña, Pablo Gomez-Ballesteros and Alberto Mateos as key components of what has now become a 100-person startup. Tabi and Alberto no longer work at the company, but Urdiales talks fondly about them and recognises their importance when it mattered the most.
Despite the fact that a lot has changed since then -the company’s first product was desktop-oriented and had a strong social network component, thanks to the influence of Tuenti-, the company’s co-CEO says that their goal has remained the same: to make the process of receiving relevant job offers easier for users, and for these to find the right job without much effort.
From desktop to mobile and the importance of Jobandtalent’s algorithm
Two years after founding the company, Urdiales and Navío realised that users were not coming back to the platform once they signed up. “The product didn’t work, users didn’t understand its value and retention wasn’t good”, he says. The only users that were actually coming back to the website were those that were heavily using Jobandtalent’s recommendation system.
JT’s recommendation system works as follows: users are asked about their job title, current company, industry, years of experience and salary. Based on that, the company shows users a stream of job offers that they can show interest in or reject (Tinder-style), improving the algorithm and thus, in theory, making the whole experience better.
“This recommendation system means a better experience for users and companies. When a job offer is posted, we’re able to match it to the right profiles based on all the user data we have, in a short period of time. This way we increase the quality of the job matching process and we reduce time-to-employee. It’s all about generating liquidity for both sides of the marketplace”, Urdiales explains.
2011 to 2013 were transitional years, as the company tried to build a mobile-first experience, and these days Urdiales says that Jobandtalent’s apps have been downloaded 9 million times and that between 4.5 and 5 million users come back to them on a monthly basis.
“We push job offers to them, instead of relying on the traditional system of workers trying to find a new job. We want to do that for them and I believe we have the right technology to do so”, he says.
Contrary to what is often perceived in the market, Urdiales explains that Jobandtalent’s is mostly a platform for blue collar jobs and workers. “We’re focused on this type of jobs, which represent a massive and underserved market”, he adds.
Jobandtalent’s business model
Product and history questions aside, what I wanted to get to is Jobandtalent’s business model. For a long time I didn’t understand how it worked, but investors in the company often talked about how their approach could change the way a significant part of the job market functions.
So I asked Urdiales himself about this. “I believe the job market is currently evolving from a lead generation or listing model to a transactional one”, he says. “This has happened in many other verticals but not in this one, and we believe we can achieve this”.
To understand what Urdiales means by applying a transactional model, we must first understand the company’s four main sources of revenue.
Companies can post job offers for free on Jobandtalent. However, the startup also presents big clients the opportunity of promoting their brand and the way they work with profile pages and such. These packages cost between €6,000 to €30,000 per year, and they allow companies to reach a wider pool of workers on the platform.
“It’s similar to Adwords, but with a very strong performance and branding component”, he says. “There’s no CPC and it’s oriented towards big companies that want to have higher visibility on Jobandtalent”. What this means is that, if you pay, you have a better chance of reaching the right users.
These ads account for 30% of the company’s revenue.
Given all the information the company supposedly has about its users (salary, industry, etc), Jobandtalent says it can help traditional advertisers reach certain audiences more efficiently.
This is a pure programmatic or RTB ad buying process.
Jobandtalent recommends users certain types of educational programs based on their professional profile and the kind of job offers they tend to apply to.
Urdiales says that this represents 40% of the company’s income, and that it’s an area “that’s growing very fast”. Clients include big institutions like Instituto de Empresa and other smaller programs, which pay Jobandtalent per lead generated.
Since September the company is testing with SMEs a new model, that they call transactional, that’s basically one which forces companies to pay between €49 to €199 per worker hired through the platform.
To make sure that Jobandtalent finds out about these hirings, they offer an incentives package to workers, which includes €250 if they open a bank account with BBVA, medical insurance, one year free membership with Pepephone and some other perks.
“We give all of this to the user, which creates a big incentive for them to report that they’ve been hired through the platform, so we don’t miss anything”, Urdiales comments.
These hiring fees represent what Urdiales calls “moving to a transactional model”. It has been done before at certain headhunting firms and for well-paid jobs, but the company believes that if they can successfully apply it to the blue collar market, they have a big opportunity in front of them.
“In January we’ll announce something big”
On top of this, Jobandtalent claims that they will launch a new transactional model in January. “It’s going to be very big, but we can’t give you more details at the moment”.
Urdiales says that they expect transactional to represent half of Jobandtalent’s revenue in mid 2016, “and more than 80% in the long run”. “What companies want is to pay per successful hire, instead of paying €100 or €150 to simply post an ad”, he notes.
Whether that happens is another key question that will depend on the company’s ability to apply their formula in the job market.
Fundraising and international expansion
Jobandtalent is currently present in Spain, UK, Mexico and Colombia, and the company is still thinking about how to best tackle the US market. “There’s no rush when it comes to the US. We are aware that if we launch there and we’re successful, the value of the company could increase exponentially. But you can also build great and long-lasting companies in Europe or Latam alone”, Urdiales says.
According to the company, they’re not in a tight financial position and they have “plenty of cash in the bank”. However, they do admit they’re talking to new investors that can help them in their international expansion. “We’re not in a hurry. It’s more about finding the right investors than just cash”, he admits.