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“There is a huge opportunity for SaaS companies in 2021”: Interview with Paddle’s co-founder Christian Owens

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With countless startups jumping on the bandwagon each month and well-established enterprises seizing the chance to capitalize on the growth of the SaaS industry, Software as a Service has been marking remarkable peaks year in year. 

London-based Christian Owens’ own experience of running a full-time software business as a teenager, and the pain points that limited its growth, led to co-founding Paddle in 2012 with Harrison Rose at the age of 18. It was their mission to build the tools and products that remove barriers to growth for scaling software businesses. By integrating checkout, payments, subscription management, and financial compliance within a single revenue delivery platform, Paddle helps ambitious software businesses grow from day one without the operational headaches. Over the last eight years, it has grown into a global revenue delivery platform for SaaS businesses, helping more than 2,000 software companies scale and sell into 200+ markets worldwide.

In this interview, Christian takes us through his journey of growing Paddle, as well as sharing a wealth of data and insights into how software sellers can capitalise on growth opportunities in 2021, how important localisation is for scaling up globally, what’s the current state of the European SaaS scene and how the industry will evolve in the future.

Hello, Christian! Thank you for joining us. Could you give us a short overview of your story? What led you to co-found Paddle?

Thanks for having me. Today, Paddle is a leading Revenue Delivery Platform for B2B Software-as-a-Service (SaaS) companies. But, Paddle’s story really began with my experience of starting and running a software business when I was 15, and the pain points that limited its growth. 

The business was taking off within 18 months and I was introduced to my co-founder, Harrison Rose, when looking for someone to help me scale the fledgling business. We saw that as the business grew, more and more of our time was being taken up with the operational side of running the business, like taking payments, rather than building and selling the product. Determined to find a solution, we pivoted the business and decided to focus on providing a complete solution to help software companies sell their products without operational headaches. 

We set up Paddle in 2012, with a mission to build the tools and products that remove barriers to growth for scaling software businesses. That’s what’s driven us ever since. Today, we’re focused on creating a SaaS ecosystem where companies succeed based on the strength of their own products rather than their ability to manage and scale complex operational processes. 

How does Paddle power the growth of B2B SaaS companies? What makes your approach stand out from the market?

At Paddle, we help ambitious software businesses grow from day one by integrating checkout, payments, subscription management, and financial compliance within a single revenue delivery platform. Unlike other players in the market, Paddle also handles market localisation and currencies, freeing up resources and manpower to enable software companies to expand across markets stress-free. Today, Paddle powers the growth of more than 2,000 software companies, enabling them to scale and sell into 200+ markets worldwide.

What has Paddle’s startup journey over the years been like? What have been some of the major challenges and how did you overcome them?

Paddle became a full-time obsession in 2012 when we moved to London, with our kitchen serving as the main boardroom for many of the company’s early stage decisions. Of course, it hasn’t all been plain-sailing since then. I’m reminded of the first piece of post we ever received. We couldn’t wait to tear open the envelope, only to be confronted by its contents, which was a legal notice informing us that we were being sued over the company name. Needless to say, we persevered through that unique challenge!

As we grew, we needed to grow our team, as well. We realised we had to rethink our approach to hiring when, having allowed the size of the team to lag behind the growth of the company, we tried to grow from 20 to 120 people within a year. We learned some really valuable lessons, and spent time refining and refreshing our approach to hiring as a result. Today, we really focus on alignment with values and culture, as well as capacity to learn, as opposed to experience listed on a potential hire’s CV. Hiring a huge amount of new talent also led to a drop in productivity, so we learned the importance of planning hiring in line with growth, so as not to overwhelm the existing team. 

Despite these challenges, we’ve successfully expanded the team from just myself and Harrison in 2012 to over 140 incredible employees today. We’ve also recently raised over $68 million (€57 million) in Series C funding to power that growth and I’m proud to say we’re now one of Europe’s fastest growing SaaS startups.

How important is localisation for SaaS startups to scale up globally? What role has it played in your company’s expansion?

That’s a great question. Localisation is crucial as software is an inherently global business, with few of the barriers to international trade that most industries face. But, for too many software companies, selling internationally and localising sales across markets is an afterthought, rather than a central part of their growth strategy. 

For many early stage SaaS businesses, international sales often start to trickle in organically as customers from across the world stumble across software products online. These sales are often seen as ‘free growth’, or something that happens without making any effort. But, those international sales are coming at the cost of all of the other potential customers that are being ignored or put off by a failure to localise your offering. The importance of thinking internationally from day one, whether by turning on different currencies or adding language options, can’t be underestimated. 

Paddle was really built to ‘scratch its own itch’ in the early stages of  the business, and part of that was developing the tools to better localise sales. Today, we strive to remove the barriers to growth for SaaS businesses, helping them to sell in over 200 countries and territories across the world. 

What has the coronavirus pandemic meant for the European SaaS scene and how it will affect the further development of Europe’s tech ecosystem in general?

Initially, most software companies faced a reckoning in the wake of the coronavirus outbreak. Businesses needed ways to cut spending on anything that wasn’t considered essential. As a result, March 2020 was the biggest month ever for churn in SaaS history. This huge spike in churn was followed by rapid growth for many SaaS providers, as new working patterns drove businesses and consumers to adopt new tools and services. As a result, over the first nine months of 2020, the SaaS industry saw growth equivalent to what we would expect to see in three to five more typical years. 

This has resulted in European software finally competing at the global stage, with European SaaS driving the continent’s tech industry growth like never before. In 2020, UiPath became the first European Cloud decacorn and Visma, a Norwegian company, became the world’s largest ever software buyout with a $12B+ valuation. Investment in European SaaS is now outpacing the US for the first time, signaling the maturing of the ecosystem and the development of a mindset that’s unique to Europe.

What’s the future of SaaS? How do you see the industry evolving in the next five years?

In the coming years, software will continue to change the way we work, shop and keep in touch with the people around us, becoming more fundamental than ever before. 

Software will also become the competitive differentiator. As technology evolves, people are going to care much less about what device they can use for something. It will be all about accessing the right applications, services and operating systems, and people will expect a coherent experience as standard across any device. 

Lastly, the notion of software companies defining themselves by geography will also become outdated. The future of running a business is about being global and international, servicing as many countries as possible. This opens up the global talent pipeline and results in a team built of people from across the world with experience gained across the world. 

How can SaaS companies capitalise on growth opportunities in 2021?

The long shadow cast by Coronavirus, coupled with some high profile successes and failures from across the tech sector in 2020, means that the era of ‘growth at all costs’  for SaaS companies is over. Tech businesses with global aspirations will need growth strategies that allow them to scale quickly and sustainably, enabling them to capitalise on growth opportunities in 2021. 

There is a huge opportunity for SaaS companies in 2021, but, as software sellers and their customer bases grow, their compliance burden will grow as well. Teams need to be thinking about capitalising on global market opportunity without allowing compliance to become an unsustainable burden on the business. 

SaaS companies will also need to be thinking about how they’re planning for growth and measuring success. We know that the only certainty as we look ahead to 2021 will be uncertainty, so a critical component of successful growth strategies will be a revenue delivery strategy focused on Net Revenue Retention (NRR), a metric that effectively measures the health of any business and its potential for growth. We’re seeing NRR as the common factor in our sellers’ growth, as well as the biggest software successes of the past few years, and it will be essential to sustainable growth in 2021. 

Given that COVID-19 has changed the landscape of work, what tips do you have for building a strong tech startup team?

Having begun as teenagers working remotely for more than two years before we ever met in person, Coronavirus has in many ways seen myself and Harrison come full circle, so we’ve really reflected on what we learned from that experience and how we could bring it to a growing team. As a founding team, we’ve seen the importance of staying in close contact with each other, evolving our dynamic over time to meet the needs of the business as it’s grown. In a remote environment, this is more important than ever for founding teams to crack.

As the industry continues its rapid growth, startups really need to be thinking about when and how to hire, to ensure they have team growth strategies in place. Hiring remotely means it’s even more important to ensure your culture and values are in place, and accepting that it’s better not to hire anyone than make the wrong hire in today’s business environment. 

While COVID-19 has brought unique challenges, there are fundamental principles that haven’t changed. Any founder can only succeed as the leader of a fast-growing company if they are able to learn and grow faster as an individual than the business is growing. Building a strong team is also about surrounding yourself with people with the same hunger for learning and the ability to develop. At Paddle, our guiding principle is that in a fast growing company like ours, you have to be able to completely relearn your role every six months and we’re relentless in our focus on candidates’ capacity to learn as a result.

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Source: https://www.eu-startups.com/2021/03/there-is-a-huge-opportunity-for-saas-companies-in-2021-interview-with-paddles-co-founder-christian-owens/

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HashChing acquires Mystro to further expand its offering to mortgage brokers

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Australia’s leading mortgage broker platform HashChing today announced it has acquired document automation and data collection company Mystro. The acquisition follows a successful period of growth for HashChing and will help to expand its service offering to mortgage brokers.

Whilst a booming property market is predicted to continue in 2021, there is also significant consolidation in the mortgage broking market with a broader shift to online/digital channels, due to the global pandemic. This is presenting a considerable challenge to mortgage brokers who need to compete with both direct bank and non-bank lenders as well as other brokers, all whilst having significantly fewer resources to spend on marketing and sales technology.

Over 1,500 mortgage brokers across Australia already utilise Mystro to streamline their document management, client data collection and loan applications. For the 2021 financial year, Mystro has processed $28 billion in loan applications. The strategic acquisition announced today will allow many more to take advantage of both technology platforms and help level the playing field for independent brokers.

CEO of HashChing Arun Maharaj said the company was committed to providing the best possible resources for brokers to be successful, and the acquisition was the natural next step in this process.

“As Australia’s leading mortgage broker and digital loans platform, we are thrilled with the opportunity that this acquisition will bring to mortgage brokers. It’s our mission to help brokers deliver great customer experiences, and we know from our conversations that they’re busier than ever before. The way they interact with customers has drastically changed over the past 12 months, and digital productivity is a big part of broker success. That’s one of the key reasons why HashChing has acquired Mystro – its laser focus on eliminating repetitive tasks and streamlining digital processes is a perfect fit with HashChing’s mission to give brokers a one-stop-shop tool for productivity and profit.”

“With the industry changing at a rapid pace, HashChing has been quick to implement strategies and provide the necessary resources for mortgage professionals to resume business as usual. At our core, we offer choice; choice to our borrowers to access better deals, and choice to our brokers to engage with clients through technology and to diversify their income in the most productive way for them. I’m very much looking forward to working with the team at Mystro to make this a successful operation for all involved,” said Mr Maharaj.

Dmitry Chourpo, Founder of Mystro, said, “We developed Mystro to eliminate manual, repetitive tasks and help our customers focus more of their time and energy on what really matters. Through this acquisition, Mystro will retain the industry-leading team and brand but will now also be able to utilise the resources of the HashChing team, who share our vision in supporting brokers and look forward to creating a seamless, innovative broker platform together.”

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Source: https://australianfintech.com.au/hashching-acquires-mystro-to-further-expand-its-offering-to-mortgage-brokers/

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Fintech offers brokers better commissions after BID

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Nodifi, one of the rising names in the asset finance space, are to offer a new bespoke product for brokers that can help them to navigate the new Best Interests Duty (BID) regulations that have been in force since the start of 2021.

It represents a concerted effort to bring brokers back to asset finance after many departed the space due to the new rules, which reduced commissions for brokers and dissuaded many from engaging with consumer-facing asset work.

“It allows brokers to set fixed rates for consumer asset finance,” said Alex Ventura of Nodifi of the new product. “The reason that they might want to do that is because of the new BID regulations: when they were introduced, it meant that brokers had to dial down rates to the base rates as that is in the best interest of the consumers. When they do that, they don’t earn a commission on it.”

“There has been a big grey area around consumer asset finance so to overcome that, we’ve introduced a new update to the platform that has set fixed rates so brokers don’t have to worry about it because the commission is already inclusive in what that has been dialled up to. That’s the main benefit.”

To read more, please click on the link below…

Source: Fintech offers brokers better commissions after BID

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Source: https://australianfintech.com.au/fintech-offers-brokers-better-commissions-after-bid/

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Lakeba ranks in FT’s High Growth Companies for the second year running

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The annual Financial Times Asia-Pacific High Growth Companies ranking places Lakeba as the fastest growing Fintech in Australia.

“Our no-nonsense approach is paying off,” says Lakeba’s CEO, Giuseppe Porcelli.

Lakeba’s growth is driven primarily by its fintech business portfolio, including eziTECH, Verimoto, ezidox, BRICKLET and Quixxi. Whilst it has 12 businesses in its portfolio, its fintech businesses deliver hyper growth. With the Financial Times also recognising Lakeba as part of Australia’s Top Fastest.

Lakeba’s eziTech Banking as a Service technologies are now being utilised by a growing consortium of organisations in the financial services sector, including some of Australia’s most progressive neobanks.

Verimoto provides remote asset and identification verification for vehicle and asset financing. It posted 170 percent YoY growth in March.

Lakeba’s electronic document curation platform, ezidox, saw significant growth. Fuelled by increased broker usage while COVID restrictions eliminated physical document transactions, and deeper integration in one of Australia’s big-5 banks and their key challenger bank. Its CDR accreditation is already fuelling the growth of ezidox’ development as a data rights intermediary.

Quixxi Security’s patented obfuscation technology is used by one of the biggest US insurers, Allstate Insurance Company; Africa’s Standard Bank Group and some of Australia’s most recognised brands. Increased adoption of 5G and eventual 6G technologies in financial services accelerate the need for Quixxi’s technology.

While Lakeba’s property fragmentation service, BRICKLET, remains unchallenged the world over. Currently limiting fragmentation to Australia, it’s portfolio of property fragments is growing in excess of $45 Million.

“We were quite happy to be the biggest fintech you’ve never heard of. But this two-year consecutive ranking by the Financial Times and Nikkei Asia puts pay to that”, smiles Porcelli.

Lakeba‘s doubling down on recruiting senior financial services executive talent, adding to its appointments of Ubank, Judo Bank, eftpos and Citi Bank executive, Alex Twigg; Goldman Sach’s Frank Zhu and Macquarie Bank’s Telly Desillas. Recently hiring Adrian Valinno, BNY Mellon’s former Digital Transformation Lead.

“It’s really important to us to keep attracting the right talent and challenging the ridiculous notion that fintech shareholders need extreme patience in seeing their returns. Our continuing rate of achievement blows that notion out of the water,” concludes Porcelli.

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Source: https://australianfintech.com.au/lakeba-ranks-in-fts-high-growth-companies-for-the-second-year-running/

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Praemium FUA up, opens Edinburgh office

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The platform has recorded increased funds under administration (FUA) of $37.9 billion as it expands its presence in the UK with the opening of an office in Edinburgh, Scotland.

For the March quarter, Praemium recorded an 11% increase in FUA, and a 96% increase compared to March 2020.

The Australian platform FUA increased 224% on the previous corresponding period to $16.9 billion while the international platform increased 42% to $4.4 billion.

The platform recorded $801 million in net platform inflows with $448 in the Australian platform for the quarter, up 149% on the previous corresponding period.

Praemium has doubled in size over the past year. Despite the pandemic, the past 12 months have been the most transformational in our story thus far,” Praemium chief executive Michael Ohanessian said.

The results follow the opening of a Praemium office in Edinburgh.

To read more, please click on the link below…

Source: Praemium FUA up, opens Edinburgh office | Financial Standard

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Source: https://australianfintech.com.au/praemium-fua-up-opens-edinburgh-office/

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