Interview with Xavier Sans, CEO and co-founder of Orain
We interviewed Xavier Sans, CEO and founder of Orain. Xavier explains what the platform is about and, above all, we focus on the rounds the startup has raised. Orain is one of the startups that Itnig has funded through its investment fund for early-stage projects…
We interviewed Xavier Sans, CEO and founder of Orain. Xavier explains what the platform is about and, above all, we focus on the rounds the startup has raised. Orain is one of the startups that Itnig has funded through its investment fund for early-stage projects.
Xavier Sans and the Orain team
What is Orain?
Xavier Sans: Orain is a payment platform for self-service machines of all kinds. It could be vending, it could be laundromats, it could be car washes, and any machine where there’s a coin involved. But besides the payment system, we include a series of services that a machine, being automatic and not having a person next to it, can’t do. Things like, for example, running all kinds of promotions.
What I mean is, we have a personalized promotions module with artificial intelligence that pushes data and promotions based on that data. A campaigns module, a 24-hour assistance module. Artificial intelligence. To respond to anything at any time. Surveys, for example. Anything you can add around an automated payment, where there’s no person nearby.
When was Orain created?
Xavier Sans: It started in 2016, almost by chance, a bit earlier actually. By chance, like almost all companies, which spot a problem or at least something that could be improved. And the thing is that with self-service machines, everything is coins, right? Or many of them are coin-operated, even today most of them are still like that, which is a huge opportunity. So we said, how can it be that there’s no digital payment option? We created a solution aimed at the self-service machine market, understanding how much revenue they generated and what we could offer them.
And that’s what we did. From there we got our first client, our first advocate, Banco Sabadell, which that same year installed the units at our headquarters in Sant Cugat, where we still are, by the way. And well, that’s how it all started, more or less.
Who founded this project?
Xavier Sans: I’m a founder along with two other people, who by chance were also incubated at a center at the Universidad Autónoma de Barcelona, which hosted us for about a year and a half. Well, there, let’s say the two founders were part of this center, are part of this center: the former director Juanjo Villanueva and Felipe Lumbreras, who are professors at the Autónoma. And they also had experience creating companies. So we teamed up and moved this project forward.
Taking over the world with vending machines – Podcast 84
What was the process like for the first round? Who took part? How much did you raise?
Xavier Sans: I always say that in 2017 there was basically one round split into two. The first phase, in October 2017, brought in business angels and a small fund. Business angels like, for example, Pere Vallés or Albert Domingo, Javier Llorente… a number of people, and I was very lucky because it wasn’t so much about the money, but about everything they contributed, and still contribute, today. Nero Ventures also took part.
That was in October. In December 2017, the second part, an industrial investor came in. Right, an industrial investor from the vending sector called Euro Vending, or well, the Spanish parent company is Euro Vending, although the companies are Italian. All together we raised almost a million euros. I don’t want to forget any of the business angels who also joined in the first round. Francesc Font, Julio Villalobos, and Antonio Delgado also joined. A lot of people came in who supported me and still support me.
And if you ask me what the money from this round was for: well, at that point it was used to finish the product, to make it stable across all the machines on the market, since we’re very focused on the vending market, given how massive it is. Also, when the industrial partner came in, it opened other markets for us, like Italy, for example. We also extended our sales network to Italy, which is the biggest vending market in Europe.
If in Spain there are about 360,000 vending machines, in Italy there are 820,000. And it’s very important because that’s where all the players are, besides the biggest operators, the manufacturers are there too. So this investment worked out really well for us because in the end it extended our sales network. We shared clients.
What was the second round Orain raised in 2020 like?
Xavier Sans: Well, it started a bit last year and continued into this year. It was a bridge round. The thing is, last year we realized we had rising numbers, always generating more revenue each year, but we realized that if we wanted to go big we had to change our business model. Before, for example, we used to sell the device, charge a saas fee, and charge commissions.
Then, last year we moved everything to a higher saas fee. Which has its pros and cons. The pros are that since you’re financing it and moving the whole model to saas, sales volume can be higher because our client doesn’t have to make such a big investment, especially in a vending business that’s massive, where an operator might have a thousand machines. It’s not the same to invest, say, 200.000 euros all at once, as it is to pay 6.000 euros a month. This gave us a recurring revenue that keeps growing, but it has its risks because in the end you have to manufacture the device, so we needed what they call “Growth Capital.”
Part of the money went towards that, to continue our expansion and consolidation in the market. It’s gone very well for us because we have very high market shares in Spain: 40 percent of clients in Spain use Orain. And now what we’re doing is growing within each of them. That’s the most important thing. That is, we had a first expansion phase in terms of clients, presenting the product, and now we’re moving on to having each of them equip more machines with Orain.
And on the other hand, we also put part of that money towards a very special product for Italy that took us to another level. It’s closely related to self-service machines, and that helped us get some very interesting metrics, so we could later have a strong round. That’s what we’re working on now.
Who took part in this second round?
Xavier Sans: The partners who were already involved continued. Itnig came in. And other business angels also came in, more from Madrid.
What was it like meeting with Itnig to raise money?
Xavier Sans: It went well because we already knew each other. Itnig, in the end, knows what it’s looking for, and since they have so much experience and have invested in successful companies, they always dig into every detail to understand it well. So there were about two or three meetings and in the end we shared the vision that they believe self-service machines need to have a digital payment system. And go a bit beyond that.
It’s not the same to have a card reader stuck in a machine as to have a system that, besides that, resolves issues for you, that can refund your money if the product didn’t drop, for example. A credit card reader doesn’t identify you, so you can’t run highly targeted promotions. So all of this clicked for them and it was pretty easy.
What’s the short and long term goal?
Xavier Sans: Well, in the times we’re living in now, everything is a bit uncertain, but it is true that we’ve come out of it pretty well, so to speak. Our sector or our business hasn’t collapsed. We’ve held steady. Obviously we’ve had to make adjustments because the economy is at a standstill, but we keep growing. In April we sold.
In May we’re selling, and the projections are that we’re going to sell a lot more because digital payment is growing, because coronavirus has somehow accelerated this process. The press said digital payments would accelerate, and it’s a fact because we’re already experiencing it, and because the companies that have machines are asking for digital payment. So we have quite high and positive expectations.
And it’s also true that now that things are recovering a bit, the deals we had before coronavirus, which got put on hold, we’re now closing them. So this year we’re definitely going to multiply our revenue and turnover quite a bit compared to last year and the year before.
If you want to know more about Orain, here’s episode #84 of the Itnig podcast, where Bernat Farrero and Juan Rodríguez (CEO @Camaloon) interview Xavi about the project.
Podcast #84: “Taking over the world by connecting vending machines with Xavi Sans”
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Itnig is a tech startup ecosystem in Barcelona, creators of Camaloon, Quipu, and Factorial, among others. We offer more than 3.500 square meters of coworking space for startups and organize daily events to discuss business and technology endlessly. At Itnig fund, we invest in teams capable of building great products and businesses.
