Emprender en CUATRO SECTORES y vivir en CUATRO CONTINENTES | Kiran Thomas de Reby y Two

Uh, not directly , but, uh, with the rest of her team. And this was, uh, quite a challenge because we moved ahead without, let's say, their blessing. There were people who were fine, yes.

Yeah. There were people who were fine, um-

Yeah

No, it, it was really challenging.

It was challenging, uh, to say the least.

Yeah, exactly. I was trying to-

Yeah. So it's, um, it's still in, in, in litigation, so-

In the US.

Doing well, thanks.

Yeah. There was a period in between where I was also part of the founding team of, uh, which is today LatAm's, let's say, top five, uh, general merchandise retailers in the world, uh, i-in the region called Linio. So I was one o- I was part of the founding team there as well, so-

... yeah, part of the journey .

Yeah

And e-commerce with Linio

That's correct. So yeah, my roots are there. I was born and raised there. Um, so my formative years were lived in, uh, were there. And then I, uh, after my education, which is engineering degree in computer science, I immigrated to the United States where I started working and got acquainted with, um-

So most of my, uh, life in the US was based in Chicago-

... in the Chicagoland area. A little bit also in, in the St. Louis Minneapolis area for consulting-based project work that was-

Yeah. Life brought me to Barce-

I'm happily living here, yes. Uh-

... very close by, uh, setting down roots, uh, literally speaking. So my, uh, uh, two-- I have two kids. They both go to school here. They're growing up here trilingual obviously Catalan-

So Catalan in school- ...uh, Spanish at home with my wife and English with me.

So. Yeah.

Mm-hmm.

Yeah. In great universities indeed. Yeah.

Sure. So, um, when I was in university, uh, in the, in the late, uh, '90s, early 2000s, it was a boom time when, you know, the IT consulting, um, phase of, of, uh, of the industry. So India was at the time, uh, servicing most of the West in terms of BPO, so business process out-outsourcing and so on.

A lot of consulting work was coming and being done in the country. India was going through a point, a time when we were solving problems for the rest of the world rather than internal problems from-

Yeah, ex-business process outsourcing insurance, uh-

.... call centers-

..... and also, um, development work, right? So-

.... uh, a lot of enterprise software, uh, work was being done in India-

.... on behalf of large consulting companies.

Um, the IBMs, Accentures-

.... uh, Deloitte, so on and so forth. So it was quite common to be, you know, campus recruited by national firms.

So Deloittes et cetera, start in India and then branch over get, get yourself, uh, a H1 visa and go to America-- Go to the US. That was a typical path. So I had that option. Uh, that's what I did. I-- It was the done thing. One, y-you know, it just catapulted your career in many ways, uh, by being able to go there and being sort of, let's say trained in a way to go and, uh, take on challenges in that market, right?

So-

Um-

It's, it's a bit of, it's a bit of both. So I had the opportunity -

... and also had, you know, family there, so it made, made the reason for me-

... to go there a lot more alluring.

So yeah, so it was a mix of consequences, right? It was not-- And it was a time when it was the done thing.

Not to say that doesn't happen now -

... uh, but now there's more of a homegrown industry-

... that, you know, is solving big problems in India. There's-- And people are finding that a lot more exciting, and people stay in the country. Um-

Mm-hmm

Yeah.

Yeah. So now there's a concept of build in India-

... build in India, build for the problems in India-

... export those solutions worldwide, right? Which, which makes sense. In the past, it was solving problems in the West-

... exporting those solutions to Third World countries-

... and, and, and developing countries.

And now there's a reckoning that, you know, there are real problems to be solved here. There's capital in those markets.

Of course, some capital comes from s- from, from-

... from outside the country, and there's a much stronger value proposition really.

In, in, in-

Yeah. And, and presently with the current administration, uh, that is so pro-business, um, has put a-

The current government in India is pro- so pro-business, uh, has put a lot of foundational elements in, in growing the economy, right? From identity verification to, uh, imagine the scale of the challenge, right? When you're talking about 1.4, 1.5 billion people being able to offer them, uh, you know, fintech services, like real, uh, un-...

You know, there was an unbanked population of what?-

... 60, 70%. Now that's been reduced. Uh, so there's real value generation in that, in, in society in India-

... that that's un- you know, that's coming at, at an unprecedented rate, right? So nothing has happened like that in the past. So yeah, so I studied computing.

Uh, uh, but always had, let's say a flair or a, an interest in pursuing something on the edge between the intersection between business and, and, and the tech-

... tech area. So my career in that sense sort of weird off into the analytics area. So that’s what I first cut my teeth doing-

... in, in the retail sector, working for a large big box retailer called, uh, OfficeMax-

.... um, in the Chicago, Chicagoland area. So it was instrumental in their post merger integration structure. Yeah, built some, you know, experience speci- at scale. So we're talking about, uh, at the time the operations were somewhere in the range of about 2,000 stores across the country, offline retail and its challenges-

... when it comes to replenishment forecasting, purchasing, and all of that. That led me into, um, uh, an opportunity in the caree- in the retail sector, uh, in consulting at Accenture's, Accenture's retail practice. I did that for quite a few years and got-

A, a bit of both again.

So I was, uh, so I was, I had a very uno- unorthodox experience there as well. So I was responsible for the client management of a very large, um, retailer called Best Buy-

... and their international expansion. It was fantastic. I was, I was living in Mexico, I was livi- living in the UK, Turkey.

Yes

So it was the same account-

... but I was responsible-

... for a significant piece of, uh-

... of the implementation and so on. So I spent-

... a better part of three years living out of my suitcase.

Uh, at that point in my life, it was great.

I can't imagine doing that now-

... and decided that, you know, the next stage of my life would be something in entrepreneurship, building on, on experience I had elaborate, I mean, got until that point. And then was very fortunate to be, uh, make an entry into the e-commerce, uh, entrepreneurship side of things, setting up, uh, Linio, linio.com, headquartered in Mexico, which, and expanding it into seven countries across LatAm.

Yeah

So yeah

Yeah, indeed. So it's, it's not entrepreneurship as you would, as we would do it today, where you're, you're starting everything from scratch. I mean, it's something akin to starting up a boy band, right? It's kind of, uh, you bring together, uh, key players and you put them together, give them capital-

... exposure, and so on. And actually-

Yeah. Salma's pitch was, "Do you want to be," um-- I recall this. "Do you wanna be, uh, sleeping under your desk as a, uh, banking executive in, in, in, in, in investment banking, or working on the spam filter for, for, for Google, or do you want to be creating the next Amazon in, uh, in Latin America?" Right.

So interestingly enough, that was, uh-

Possibly

Some iteration of that, right?

But nevertheless, it struck strong.

It, it struck a, it struck a very, uh, strong chord with me. So I joined, uh, Linio like two m- two or three months in, so I wasn't, I didn't get the designation of co-founder, right? So I-

Yeah. It's not very much, but then, you know, you had, you ha- So I met, uh, so Andreas, who is my co-founder at Two, um, he was, he was the founder and CEO at, um, at, uh, Linio. We had a call. I was in Mexico. He said, "Come join me." So I was one of the first, let's say executive, not executive, but one of the leadership team members.

Uh, my role evolved. So this was the, my first experience in e-commerce, building up things from scratch, who I was what employee number 30 or 40 within the team, uh, rapidly growing.

At its peak we were about 1,600 people expanding a- across the region.

Vertical growth

Yeah, yeah.

Many times

So yeah, so we've, we experienced the ups and downs. Uh, it was a great learning experience, great incubator model in that you, you, you build a lot of skills, you learn things re- really fast. So yeah, just fond memories, great experience.

So Linear when I left, we were operating in six or seven countries-

... uh, Spanish speaking, excluding-

So we pivoted into a marketplace.

So initially in the first year it was, you know, procure to buy, uh-

... model. Um, in I say a year two or o- around then we pivoted into a marketplace model, yeah.

It's, uh, exited. So it-

Yeah, it sold. So Falabella, which is, uh, a Chilean retailer, um, b- made an acquisition in 2018. If you sort of compare it with capital raised and, uh, relative to, let's say, uh-

... valuation, yeah, it was, it was an okay exit. For the management team, not so great, but for growth investors who came in late with liqui- liquidation preferences, it was good. Yeah, so-

Yeah, yeah, def-

And that's, that's, that's ...

When this-

Uh, I was based in Mexico City, and I moved to, uh, Barcelona in 2016. Um-

Correct, yeah.

But before the acquisition.

So yeah, I was there for four years and then I left.

Um, yeah, missed the acquisition by, like, uh, 18 months. I think it was pretty, it was pretty intense from what I hear.

Yeah, so I known Pep for, from my entry into, into Barcelona, so I'd known him, uh, from some of the events on- in the, in the startup sp- space.

Well-

.

Uh, so he was part of Numa. I think it was, yeah.

Uh-

Their own event.

Yeah, so as part of, uh-

Yeah, you should have him on, of course. Uh, so Numa was, um … I, I, I believe, I don't know if they're still around, but that was, it was, um, an offshoot of Mobile World Congress, right? So it was part of the Mobile World Fund.

They had some participation in that, uh, and it was an incubator. Uh, so met him at one of the events there. Had some other connection-

No, actually, I, I had a pr- i- interesting enough, and it r- it reminds me, I had another connection to Pep just through his, um, girlfriend at the time, was a friend of, um, my wife's sister. So it was a totally-

... random personal connection coupled with events and so on, kept in touch.

Uh, I'd say it was, you know, a, a consequence of the time. Um, uh, Pep drove the, the idea creation and so on, so h- he was, like, pretty clear he wanted to do this. Uh, we met around the time when I was, uh, leaving Privalia, and, uh-

So, uh-

No, it was the other way around. So I l- I left Privalia-

... and I, I, I started at, uh, with Reby. So it was-

Yeah, yeah. So I wanted to start something. The timing was just brilliant. Like, uh, uh, when I was having my going away party at Privalia, I was already, Reby was running. So yeah, so I remember discussing over-

No, there was no welcome party. It was just me and Pep. Just two people.

Exactly

Yeah. And a week later we were in, uh-

Yeah, initially. Uh, and then we brought on about six months later two more, um, Guillaume and Cristina, who basically joined us, um, to build out the engineering, let's say, and the China angle of, of supplying that-

Yeah.

Hardware. S- hardware.

Yeah.

Yeah, it was product, everything else initially.

Yeah. Uh, I was actually the CEO initially.

So when I started, when we started, Pep was everything to do with regulatory, uh, legal, and fundraising. Um-

That was Pep.

And I was running all things, uh, uh, from a CEO's standpoint.

Very soon I realized that this was a hairy animal. I, I wasn't excelling at that job. Um, so we, Guillaume took over from me. So Guillaume is, um, who came in as a CEO. Uh-

Yeah, so he came in-- You could call him a founder, yes. So-

Yeah.

Yeah. No problem.

Yeah, indeed. A significant, um, stake in the business for, uh, for all, uh, founders, of course. Yeah.

It did. It did. Right. So because, uh, when Guillaume and Cristina came into the business, Guillaume came with, like, 10 years of experience living in China-

.... uh, hardware experience, the connections on the ground. We built a proprietary, uh, scooter from, from scratch. So what we had on the streets were not-

..... was unique.

It was not, uh, mass produced off the shelf like, uh, w- all the other brands were doing at the time.

Indeed, uh, because we were able to do it very, very, um, cost efficiently.

Uh, so we didn't raise a lot of capital. Uh-

So again, when we say building in, in our context, it was having the right connections to a syndicate of suppliers that have the capability to put something together relatively fast. And-

designed it and, and-

Exactly

Yeah.

Yeah, indeed. But when you compared what we put to market, w-, uh-

It was an advantage.

It was like a tank, right? If you-

... if you recall, it was, uh ... And we still have, I mean, still, uh, a lot of them in, in, in various, uh, inventory depots around which, which will be liquidated at some point. But yeah, so that was, um, so it, it was an advantage and we saw it, uh, early in the journey. Uh, and we were able to do it pretty capital efficiently without raising millions like other players did.

So initial tr- initial … something like, uh, when I, when I was operation involved, we raised about, in the first round, about three and a half million, and then another five. So-

... eight, eight and half million in equity. And then we had-

Um, so it wasn't exactly. So it was one of the original board members of Tesla-

… uh, was, uh, this investor called Simon Rothman who, uh, cut us our first check actually.

He, he actually wrote us our first check.

So-

Yeah.

Yep.

Yeah. That was-

Yeah. We built our own, uh, firmware-

IoT, everything. All components.

Yeah. So-

Yeah, yeah, yeah.

Sure. Um, so we started, I think in July of 2018.

Um, by, I think October, November, we had built the, the basic platform, right? So-

No. App was just the icing on the cake.

So I'm talking about the IoT.

Uh, so firmware, the physical-

E- e- ex- exactly

The BMS,-

.. the Battery Management System. Everything was, was ready.

And this was like from scratch to, from nothing to something, right? The first proprietary-- Sorry, the first prototypes we were testing in November, and by first or second week of December, we were able to put out 50 scooters in Barcelona. And this was, uh, this was interesting because, uh, we obviously didn't ...

There was a regul- I mean, there was a regulatory gray area, uh, we were able to exploit.

Yeah, yeah, yeah. So, uh, but there were some workarounds. We came up with a lock anchoring the scooter-

…. to bike m- bike racks and so on, which actually helped keep theft damage, and the littering problem, a- address those things. We were in a litig- litigious process here in our flagship market, which is unfortunate, but you know, we kept going.

With the city. Uh, we-

Uh, not directly, but, uh, with the rest of her team, and this was, uh, quite a challenge because we moved ahead without, let's say, their blessing. Uh, but as far as-

Well, they still do, right?

Look, see look, so I was rather … So we were all very idealized, right, in, in, in pursuing something like this. "Okay, we're gonna disrupt public mobility. Uh, we're gonna create-"

In a good way.

Yeah, yeah

But, but in hindsight, I don't … So there are other markets like Zaragoza where there is a real, uh, mobility issue. Public transportation is sparse. If you go there at certain times of the day, y- you can't find a cab. There's, there's, there's motors and whatnot, but there's nothing else in between. At that time, it was the case.

So there, it made a lot of sense. But in a city like Barcelona where you have, um, you know, millions of tourists, it is a public nuisance. I give you that. An eco-

It is a public nuisance, right? So free floating, uh-

It, it, it, it is, and it-

Yeah, it does create problems. And I'll be-- You know, you have to be honest-

… and acknowledge that. So, and especially around, you know, dense neighborhoods like the Gothic and so on-

… it's not nice, right? Some people zipping around these things. Um, yeah, things ... It, it hadn't been proven out. Uh, there were, there was a lot to be desired appearing from-

No

Um, no, not on … So fortunately, no.

Uh, but there was one incident where someone was hurt. Uh, but nothing, no fata- no fatalities as I recall, uh, as far as, uh, I was i- I was, I was, I was involved.

So the agreement was, um, this is not approved, number one. Uh, it's, it needs, there needs to be a proper process. Uh, it needs to be evaluated in terms of safety, in terms of all of that. We went through the process of registering each one of these vehicles with the City Hall. There was a process that we, that we-

… that we fulfilled.

Huh?

A new process-

… but we registered them just like all the other mobility operators.

Yeah, so we had the-

Exactly. We had the QR code and everything.

Uh, so we, we, we fulfilled all those requirements. But, you know, it's a political thing, right? So you can't influence it. Uh, you t- you do your best, you workaround. Using the experience that we built here in Barcelona and, and the, and the, uh, the density and the number of rides, um, uh, we, we were able to drive operational exc- excellence in terms of building a capability of maintaining the fleet, building partnerships with, you know, 3PLs, third party logistics providers, uh, building that capability and exporting it to other markets such as Zaragoza, Gijón, Sevilla, all of these other places that Reby op- eventually ended up operating in through public tenders.

So taking this experience, building, working closely with building a, a legal, uh, strategy Having a very strong legal team that was enabling all of these other cities to, you know, come up with a public policy around transportation. He- participating in those RFPs and building long-term relationships with those cities

So it, it... To that end, it really helped. But it was-- It's a shame that we, uh, couldn't operate in the city

In the home city, exactly. But, you know-

Yeah

Yeah

No, but great point.

But great point, Jordi, because what happened? In Paris specifically citing this example, they did a referendum, right, uh, six months ago, and, and the citizens voted ag-against removing-

Not-

... no, they, they voted against scooters.

Yeah. So-

Yeah.

Yeah.

And, and-

And, and the consequences are-

But the consequence is that, you know, Paris is not gonna have scooters. Zero. This sort of, uh-

... free floating, uh, mobility options-

... is going to be gone very soon.

Bicycles will continue.

Yes

Yeah, the parking. For me, the problem is the parking-

Because the driving-

Yeah

But in a dense city like Barcelona and, and Paris and so on, where you just don't have the public infrastructure, it's very hard.

Mm-hmm.

Yep. Yep

Mm-hmm.

Yeah. Technically speaking, you're not supposed to ride on, um, on the aceras, so on the sidewalks.

On the bicycle lanes, yes. But, but practically speaking, you see people zipping by you. So there's a nuisance factor, right? So I'm not surprised-

... that there's been a huge backlash. And the i- so coming back to, to Reby, uh, scooters were just one mode of transport. So we had bicycles-

... for Reby. The plan obviously was to include other modes of transport like motors, scooters.

Uh, eventually, yes.

Um, yeah. So-

Yeah. So I, um, they did. So it was basically, um, uh, a different kind of model, uh, a franchise model-

... where, you know, um, franchisees, uh, use the platform to, to, to basically o-offer their offerings. So yes.

Yeah. So-

I-it-

So, so there's very few, uh, operators left from that original cohort of American companies, right? So-

... Lime is still, Lime is still one of the dominant players. Bird's practically gone. Uh, and then in Europe you have, uh-

... the Swedish Voi, which has still got a dominant presence in the Nordics.

Tier and Voi I think are-

... they merge or something to that effect. Yeah. So yep, they're, they're still relevant. Uh, and the vast majority of other players have, have disappeared, right? Or, or practically disappearing. So it's a tough model. Uh, it's -- We had the right instincts to invest in, in, and build a capability ground up from the hardware and so on.

Um, so to that end, while it lasted, it was f- it was good. Um, but it's, it's the unit economics are very strong, or very hard.

Because the cost to serve is, is very, is very high. The logistics is not cheap.

No, no. So I'm just talking about operational costs.

Yeah

So, um, yes, but we were able to do it for significantly less.

Yeah.

More or less. Yeah.

The maintenance is very, is, is, is problematic. So maintenance being recharging. So if you have replaceable-

...replaceable batteries, it, it drops significantly, but that adds on a lot of cost. Uh-

Exactly

So operationally it's expensive. Uh-

For maintenance

Yep. Yeah. So-

Exactly

Yeah. And, and redistribution, right? So ultimately comes down to, uh, so we have to be able to redistribute the fleet, uh, to certain points in where there's demand is going to peak, right? So if you take-

...uh, what happened, let's say, in the peak months between July to September, 80% of the fleet would be in, uh-

...in Noi curry. So you need to move those things back to, uh, to, to-

Uh,-

...I suppose, yeah. So it's this congregation of, uh-

So it, it can be frustrating in that sense from a, from a user perspective if you don't distribute. Uh, so we, we did a decent job but that was not cost efficient. We didn't crack that model like for a while

Yeah, yeah

Yeah, so we, we, we did that. Uh, but you know, the start and stop was very frustrating right? So we didn't have enough operational data to be able to really optimize those models to be able to drive real value 'cause you know you ... One week you'd be on one week you'd be off. Uh, this cat and mouse with the city which is frustrating.

It, uh, it didn't help. Um-

Yeah.

Yeah, yeah

Uh, there were people who were fined yes.

Yeah. There were people who were fined, um-

Yeah

No i- it was really challenging. It was challenging, uh, to say the least. Um anyway, so Reby was um, a great experience in that, uh- You left after couple three years something like that?

So yeah I uh, two years in I left my operation role so I um, I exited. I-- So it was also, um, the timing also had to do with when we went with the franchise model around the pandemic s- timeframe. Uh, I opted out and it was also a, a combination of factors right?

So Andreas my c- uh, CEO and cofounder of Two had come back from Lineo. He was in Norway getting ready to start something up. We had a couple chats to build something that would become Two was really interesting and just, you know, I like to touch upon this an- it'll be perfect segue to g- get into why Two came about and what was the problem we were solving.

So in our experience at, uh, at Lineo, Lineo was a marketplace, uh, merchant right? So we were selling stuff on behalf of merchants and about 20% of our clientele, clients where businesses making purchases on our platform, and typically these businesses required to make or to make purchases on invoice right?

So with some deferred mode of payment some credit, and as big as Lineo was it was not a core competency. We could not create underwrite. We could not, um, verify identity issue invoices follow up collections all of that. It was a huge challenge, and we were losing a lot of sales. A typical, uh, experience of some of these customers w- They would come into the, you know, checkout page and they'd let's see pay with credit card pay with cash.

They pick up the phone call customer service, "How can I pay on invoice?" I wanna buy 50 TVs, uh, you know put-"

"pay in 30 days". We tried to salvage some of the sales but we'd lose them. So that's the point, the, the, the challenge that we are trying to solve or we are solving here today with Two and you know that resonated really well with me early stage let's get this going j- working again with Andres on, on this wha- was amazing.

So, uh, it was, you know tough decision to make to leave Reby. Uh, Pep was very understanding. Um-

Mm-hmm

Mm-hmm

Yeah

Yep.

Yeah still with a lot of, uh, guilt, uh, and uh and stress obviously. Um, so it was a tough time for the business. It was, you know the pandemic was on. The business was slowly getting back on its feet. I had this thing, uh, st- This was precisely three years ago.

So September in 2020. Um, so yeah I it, I was clear in what I wanted and I was also, uh, at a point in my life, uh, where I wanted to put myself and my family forward right first. The Reby experience was great but, and where I was within the company what I could offer in terms regulatory aspects of things fundraising, uh, and so on.

I wasn't adding a lot of value then personally. So it was reckoning that look I could better somewhere else or I continue here and I think you know when I had that conversation with Pep it, it was hard but he was understanding. You know this ultimately a, a w-where your heart is is what you do, um, and I stayed on in a advisory capacity beyond that but I, I removed myself from day-to-day starting you know in 2020 September October, uh, and then around January when things really started picking up with Two I was fully out so…

I stayed as a shareholder until, um, until the acquisition by SOUL or House of Lithium which was basically they led us Series A at Reby. Uh, this was just after I, I left so they were one of biggest investors.

Yeah

Correct yep that offered signed executed yeah.

No uh, I, I didn't sell at the Series A so I sold uh–

…..before the acquisition. Just before the acquisition.

Exactly I was gonna begin-

Yeah so it's um, it's still in, in litigation so whe-

In the US uh because this is uh Delaware corporation and uh last outcome was that you know it we need to basically go try it again And yeah, that's where it is. It's-

So I, I-

... I, I, I'm not on, on top of the details, uh, there, but basically they were one of the investors.

Right? So a lead investor with a-

... with a, with a significant stake in the business already prior to the acquisition. And from what I understand, their strategy was to build a constellation of brands.

Right? So-

... electromobility, um, battery management-

... uh, and so on. And Reby was fit into the, the picture-

... as one, one piece of that puzzle. Uh, and they had acquired another cus- another company in the battery space, uh, and so on. And this was basically the plan to float, uh, an entity that gets, uh, o- on the, on the Canadian p- uh, stock exchange.

So to that end, the Reby deal would be, you know, Reby would be acquired wholly, uh, by House of Lithia.

Uh, yeah, like s- you know, cash to pay out the, the equity holders, uh, and, and, and some surplus for, for, for some early-

Yeah

And that was basically the deal, deal.

Yeah. It would, it would've been a fantastic, uh, outcome for, um-

For the shareholder

Yeah, yeah. Because they-

Yeah, yeah. But you know, the way things ended up is that, uh-

So litigation is expensive, uh-

So-

There's, there's m- there's many things, right? So one is, uh, yes, so the company needed to raise funds, right? So either through an acquisition or through the private markets, uh, as a extension to the series A or B or whatever. We ha- we had a term sheet that was executed and signed, uh, not term sheet, a sale document, everything done.

Transaction happened

Signed, exactly.

And-

A portion of, of the funds were wired as well.

Yeah.

Yeah. So the deal w- had happened. In the second-

... the second wire never came. The, the joint statement, the press release was, uh, happened with them. So there was a, there was an article, TechCrunch, everything-

... right? So everything went out. And then, yeah, there was like a, I suppose a Twitter Elon moment on their end. Um, and they, they, they'd done their best to get out of it. So i-

Yeah. So that-

Yeah. And that's basically where we are today. It's, uh-

Yeah.

Yeah.

Yeah

Yeah, so, you know, for practical purposes, there is a, there is hope. Um-

... so yeah, I think, you know-

Yeah.

Yeah

Yeah

Yeah. That's true. So things are, uh, where they are today because of that, because of that reason.

Yeah.

Yeah, yeah

Mm-hmm.

Yeah, so the-

... so basically what it's too. We offer an API payment method for API based payment method for B2B. So B2B specific. You can simplify it by saying it's a buy now, pay later solution for specifically for B2B. So what that entails is we enable, um, businesses that make purchases, uh, on behalf of their bui- uh, so, or people that make purchases on behalf of their business.

So let's take the use case of Factorial purchasing computers from Apple-

... or, um, Amazon.

Right? So you have an account-

... uh, a trade account with one of these companies.

So, uh-

... and, uh, and Two basically offers a fun- fully funded invoice solution-

... uh, to Amazon to fund, um, the purchases on behalf of Factorial.

You don't pay-

Correct.

Correct.

Sure.

Oh, it's a-

So it depends on the operating model, uh, and where we operate. W- we are not a white label solution per se.

So we exist as a payment method.

With, with us. Exactly

Exactly. So we, uh, help the merchant delegate-

... all of the collections, uh, the risk, the, the credit and the fraud risk to us.

Yeah, but, but-

... is specifically B2B. Exactly. So it's a much larger-

.. product space

For, from whose perspective?

Yeah. So it's, it's a lot harder-

The, the risk is a lot harder to assess because-

... you know, you don't have, uh, credit bureau information, so it, it's a capability to build that we've, we have now three years under our belt doing it in three markets.

Yes. We have a, we built a-

Yeah

Yeah, exactly. So we, we built, we've invested in, in to make that happen. Um, so we give you, um, a credit worthiness score, and then you know right away whether you can continue with the purchase or not. And in some cases, uh, the merchant has the capability to show whether the payment method is relevant for you or not.

So factoring, so Factoring happens in a post-sale context where the issue--the invoice is created, and then you sell the invoice. So what we're doing is real time decision making, right? So we are s- doing it at the point of sale.

So yes, it is factoring but it's factoring with a twist. The invoice-

It's a much faster onboarding-

But just re-but it's real time

No, that's-

...that is factoring

Yeah. That's right.

So your account payables, right?

So your, your account receivables, you can sell your account receivables.

Exactly. Ahead of discount

Yeah.

No. So A- that would be great. But uh, we ... No, so our, uh, so in Sweden we operate with, uh, Net on Net which is one of the largest, uh, e-commerce, uh, players in the region.

In Norway, the authorized Apple distributor is, uh, offers Two as a, as a payment method. Uh, so we service everything from SaaS consultancies, physical goods, uh, purchasing, and, uh, and in the construction space as well. So, uh, marketplaces are also an option, uh, that sort o-

We charge the merchant, so-

...so the seller.

So we charge the seller. So it's, it's, it's exactly like offering, um-

No. So think of it like you have--you're selling a product on your site, right? And you offer credit card as a payment method. So you basically, we're, we're, we're basically their payment method. Instead of you paying Stripe, you're paying us.

Exactly. Much higher conversion rate-

...specifically for B2B, right? So that's one.

So coming, so come up-

So it's a lost sales, it's a loss, lost sale opportunity that you, that you, that you don't lose. Um, then the operational complexity, right? Most businesses are not in the, should not be in the business of credit underwriting collections and so on, right? So it's operationally complex. There's overhead that is outsourced to Two.

So Two basically does all of that on behalf of those customers.

It's on us

It's my, it's our problem. Exactly. Like-

Exactly. Exactly.

Yes, we take the hit, of course. So it's, this is a capability that, uh, we built-

So there's no interest. So it's not interest rate based. It's basically a transaction fee.

Yeah. It's a transaction fee which i-it's a-

So think of it as-

So think of it as the, it, it's on par with the transaction fee that you would pay Stripe or for an AmEx transaction, right??

Two-ish percent, yeah.

On, on a fifteen to thirty day invoice. So if, if it's a different product, which is basically installments, which we could do anywhere between three to twelve months, it'll be higher.

Um, through, through-

No. Yeah, exactly.

Wire transfer or, uh, Credit Card.

Um, surprisingly, no. So we're pretty efficient, so-

So we do have a small collections team, which is like one or two people. Uh-

Yeah

Yeah, yeah. And, and the UK as well. Um, so it's basically six-

No

So, so our basically collections unit is about three people, but it's, it's highly automized, automated, so our bank operations, um, capable-

Yes, uh, there are. Small, it's a small percentage. But, you know, in, in this business, what you do is you don't, y-you build up, you build up the confidence, right? So there are some first time … Th-there is, there is first party fraud, uh, but it's a very small p-percentage. We don't take big risks, and there is an identity verification piece associated with the, with the buyer experience.

Yeah, but it's diversified, right? It's across industries, it's across m-multiple buyers.

Uh, yeah.

Yeah

So we're transacting in the almost double digits, uh, volume per mo- on a monthly basis.

No, b- slightly more than that.

Uh, we're on track to basically two X, uh, two point five X what we did in twenty twenty two.

The, the demand is there, growth is there, and we're-

Norway, Sweden-

...and the UK. And we have-

A sustainable business.

Yeah, indeed too. So, uh-

So yes. So we are, we, we had to start at the lower end, which is small, small and medium businesses.

The risk is there, but you know, if you build, uh, so think about it this way, right? So who's taking the risk today? It's the merchant. If they don't offer any services, uh, any, any buy now, pay later, or th-th-

...let's say they are just extending invoice or net terms on invoice. They're taking the risk. Their, their sales are growing, and what they're doing is basically forwarding us good customers. There's a need, there's a digital-

Good customers.

Yeah, but they're taking, so-

But th- but there's a working capital issue, right? See, if you, if they're gonna pay you in thirty days, what we're doing is we pay you right away.

So there is a valuable position there.

There's no collections. They don't have to have a team running after people to get-

Sure, of course. But you reject them with algorithm.

Yeah. So, so we-

...uh, so our capability-

They give us customers. Exactly. So-

Yeah. That's, that's a fair point though.

Mm-hmm

It's a high-volume business. It's like payments, right? Payments is, um-

... it's a high scale business. You have to, you have to be operating at scale.

Yeah. And that's, uh-

Yeah. That's, um, that's the path we're on, uh, the trajectory we're on, and, uh, so far so good. So ...

Yeah. So we, uh, so we raised our initial round, um, in 2021. So our pre-

Yeah. So precede, uh, uh, which was led by, uh, Sequoia and Loc- Globe, uh, and Visionaries Club, and then we followed that up in the summer with a, with a seed round, and then our Series A around, uh, we, we closed it last October, uh, in 2022.

Yeah, but, you know, it's, uh,... The timing was, uh, coulda been worse, but we did-

... we, we did well in that sense. Uh-

So the most recent round was about 20 million-

... uh, USD. Mm. So in total we are about 28.

So we're headquartered-

... uh, and we're headquartered and, uh, incorporated in Norway, so it's a Norwegian-

... it's a Norwegian entity.

So the team is distributed between, uh, Oslo, which is where our, uh... There's about 20 people there. There's another 20 in London. Sweden has a small presence, which is about five or six people, and we have a, a tech outpost in, in Glasgow. Uh, so we built small team there, about seven, eight people, and then our distributor workforce across other, other markets, but that's a small, smaller proportion of, uh, of employees who are remote.

So, um, in the next three to five years being one of the largest B2B payment solutions, uh, with a huge presence in, in, in the US, just, which is the next big market for us to capture. Um, yeah, so processing bi- in, in the billions, and of course being contribution margin, uh, positive-

... or profitable.

That's, uh-

... working towards that, and yeah, let's see. So the tailwinds are there. You know, their, uh, businesses need working capital relief, and, uh, that's something we do really well.

Yeah. So it's evolved. Uh, again, I've done many things at Two. So started in the product role, uh, transitioned into taking care of all things, uh, people and investor relations, so ins- internal and external in that context. Um, today I'm, I'm in the process... I, I th- I don't know if I mentioned it earlier, so I'm in the process of transitioning out of an operating role at Two.

Um, will do that over the next four or five months. The reason being primarily I've spent three years being one of the key members of the team, uh, working remotely from Barcelona. The company's at a stage where, you know, we require a physical presence-

... in either Oslo or London for someone of my-

Yeah. So-

For me personally, it would be, uh, for me to be more engaged, to be m- on, on stuff on a day-to-day basis, and I think, you know, y-you have a better velocity when it comes to decision making, uh, higher engagement, so on.

Um, and for me it's very hard to do that, uh, from where I am here.

Mm-hmm

Yep.

Yeah. But-

From Linear... No, Prevalia is exception, but-

... from Linear-

... Well, it wasn't so dramatic as death, but there were tough times, right? Uh, and yeah. So you-you're right.

It is very hard.

It is very hard

It is hard, but-

Mm-hmm. Mm-hmm. Good point. Um, so obviously with experience you don't, uh... It, it, the journey gets easier, but not so much easier, right? So, so Linear was a different example. So Reby was hard initially, right? Two wasn't that hard.

Y- y- yeah. Yes. Fair enough. Yeah. It was hard all along. Uh, but there's, there's some valuable learnings. But two great team we put together, a great bunch of people.

It was hard. Things picked up –

.... and you start building. Hopefully the next one, you know, uh, there's enough of a, you know, pattern recognition bank that's-

... been built up that could, that I could, I can, I can rely on to make the next whatever it is, uh, fine, you know? So.

Yeah

Uh, I'll, I'll nee- I'll, I'll need to work on that, uh, significantly before I come f- come forward.

Uh-

Oof. Okay, let me start with podcasts. So- As a podcast I'd say I, I follow the Huberman Lab's-

... uh, podcast. Um, I, I really value, um, my, the content on that. Uh, that's one of my... Is up there.

I also do, you know, uh, financial po- uh, Financial Po- Policy, FP, which is really good just to get you aware of-

Yeah. Yeah.

Foreign policy, not financial policy.

Foreign policy.

It's pretty good. It, it just opens your mind to, uh, what's out there from a macro standpoint-

... and so on. So these are the two ones that I really follow from podcasts. Books, I would say I got into "The Hitchhiker's," uh, "Guide to the Galaxy." It's, it's-

.. obviously fiction.

Classic. I haven't finished all of them, so I, I'm, I'm the first... I've got through the first three We have a couple, couple left. So that's been a really interesting read on how to sort of go through life and not take yourself too seriously. Lots of learnings there. Uh, and then person-- so, you know, on the personal front, it's, uh, I have a lot to thank my mother for.

So she's, she's no longer with us, so she was a big influence in my life early on. And from a business context, let's say, you know, learnings people I've worked with would you say or just, you know, someone you look forward to?

Yeah. So I'd say, uh, Bezos for his like obsession when, when it comes to customer centricity and so on was, uh, um, is, is someone I would really look up to in that sense. Um, that, that, you know, that obsession on, on creating a product that's great meeting people's needs and touching people's lives in that regard.

Yeah.

You know what-

Well, that happens everywhere, right? That can happen. It happens, uh-

Uh, no, but for all that, all said and done, I think, you know, what they've done for the ecosystem at that time was-

I mean, they get a hard rap, but you know, there's a lot of, lot of businesses that come out of that ecosystem, the lineal mafia if you will.

So it's-- I have a lot to tha-- you have a lot to thank for-- be thankful for, for that experience. So it's not a...

Uh, and it's like in life, right? You meet all kinds of people, uh, some tougher than others different. It's a, it's an array of experiences and you just basically have to take it for what it is.

Thank you very much. Uh, this has been a pleasure and uh-

Yes. Thank you.