In a world where client onboarding can take a week if not more, Mikkel Skarnager and Ciprian Florescu saw an opportunity. These days, the many outdated onboarding solutions are cost-intensive, and don’t effectively integrate with local regulatory services in a short time. With HelloFlow, setting up a client onboarding process takes minutes, not weeks – and no coding needed. HelloFlow has now closed a $1.6m seed round led by Seedcamp and Danish VC PreSeed Ventures in an effort to tap into a rapidly growing market that is estimated to be valued at €1 billion.
We met the team back in March and are thrilled to have led the initial investment to support their vision in simplifying the digital onboarding process. From day one, Mikkel and Ciprian demonstrated their depth of knowledge for the space and their ambition for building a breakthrough company in the client onboarding space.
“Using the platform, you can set up a proper, sleek, and compliant onboarding process and share it with the clients, all inside a single day,” Mikkel Skarnager comments, Co-Founder and CEO of HelloFlow. “This makes it possible to launch your service in new markets across the world within 10 minutes.” Mikkel’s vision to create a solution with low barriers to digitalization came from being in charge of Digital Transformation at Saxo Bank, where he built a bespoke onboarding and customer identity verification (KYC) setup and trading platform for the Danish bank.
“HelloFlow’s plug and play solution is a real game-changer for client onboarding, allowing companies to set up processes quickly without the need for custom code,” our partner Tom Wilson comments.“We’re delighted to have the opportunity to work with Mikkel and Ciprian and support them in helping companies say goodbye to slow client onboarding.”
With the new raise, HelloFlow plans to focus on accelerating product development, and expand beyond the financial industry by offering solutions for the legal and accounting sectors.
We’re delighted to be backing Mikkel, Ciprian and the rest of the team in this exciting journey. You can check out HelloFlow here, and even test out a free trial.
Tom Wilson, Carlos Espinal, Kate McGinn
Raising funds is challenging both because of expectations people have of you, but also because of the competitive circumstances you find yourself in with other companies tackling the same market as you. These days, with public markets at an all-time high and many public investors looking to get into private markets, startups valuations and round sizes have reached new heights and as a consequence have warped investors’ expectations of companies. Only a short time ago, founders and VC markets could rely on traditional back-of-the-envelope metrics to help benchmark for fundraising readiness. These days, however, it increasingly feels like the traditional metric of “100k MRR” is no longer sufficiently adequate to use as guidance for your next round (in this case a Series A). Let’s unpack how some companies are adapting to these changing circumstances by first understanding the macro context, and then suggesting a possible course of action to take.
Sectors
Firstly, it starts with sectors. Some sectors are being judged almost exclusively on promise, whereas others are, at best, being judged by metrics alone, and at worst, being penalized by their metrics.This may have to do with how the market is giving premiums to companies whose promise of fast growth is sufficient to generate interest, rather than the ‘stability’ of demonstrated, but slower growth.
In this “risk-on” world, sectors like consumer social, therefore, rise to the forefront. Companies in this sector with very early but growing metrics can attract huge amounts of investor attention in the search for the new holy grail of a breakout platform (case in point, Clubhouse). Similarly, businesses that were historically viewed as potentially challenging from a unit economics perspective and requiring large amounts of capital to scale (i.e. the on-demand grocery delivery sector) are viewed more favourably in today’s context partly because more weight is given to the potentially massive market they are serving rather than the risk associated with access to future funding and/or challenges around efficiently scaling the business model.
The flip side of the coin is that those businesses that are focused more on selling to what could be viewed as a less sexy, smaller or steadier part of the market (i.e. SaaS selling to professional services) can suffer loss of investment attention as a result. This can understandably be frustrating for founders in the latter category, particularly if the metrics they are going to market with are in-line with what they set out to achieve and/or are at or exceeding expectations for a company at their stage. Regardless of whether this might be fair or not, such founders will have to show metrics that are considerably beyond those that are expected of them when they go out to market in order to really capture the attention of VCs. Unfortunately, this phenomenon further distorts the market around what progress metrics are required because certain sectors might see the bar increasing whereas for others it seems to be getting less and less!
In other words, if you are in a sector that can return billions of dollars in record time, you will be rewarded with greater leniency in your numbers and traction. If you show slower but steady growth, you might pique the interest of more committed investors, but you will likely not command the level of feeding frenzy some companies are generating.
Team Quality
Secondly, your ‘team’ continues to be a key factor in driving how a company is treated during a fundraise, but as more people with experience in company-building and industry-knowledge are founding startups, the expectations thrust upon them by investors to build billion-dollar outcomes is also growing in proportion. Some early “seed” rounds have gone up to 15m+ on the top end and be reported as such in Techcrunch for example because of this outsized expectation early on!
High-quality talent with stellar track records and extensive personal networks are able to command round sizes and associated company valuations for seed rounds that can exceed those of what previously would have amounted to a Series A because investors are assuming that a solid background is more ‘correlated’ with startup success. They are willing to pay a premium over other similar companies, even if certain fundamentals about the team are not there, for example, whether the team is full-time or not, or if the founder has founder-market-fit in this new sector.
Again, this is further adding to the confusing state of the market, making founders uncertain as to when is the right time to raise and what investors are actually looking for when raising their next Series A sized round.
Fundraising Narrative
With this distortion lens warping traditional metrics of success, and greater emphasis being placed on the ‘potential’ of growth early on, be it via sector or team, what’s left for founders that aren’t clearly in either camp? One remaining element that might help you take advantage of today’s circumstances is your narrative. Ultimately, at the early stages, the right narrative ties commercial trade-offs together in a way that convincingly points towards a large outcome even if the start of the growth is not quite where it needs to be. As discussed above, in a funding environment that has a risk-on mindset, thinking about how you frame the opportunity and emphasise the disproportionately large potential upside could be key to landing your next round funding partner of choice.
While the current market is confusing and, at times it feels like there is a lot of hot air, this is still one of the best times in history to be raising funds…. it is not only lenient on you if you are not as far along as you should be relative to other companies (provided on the conditions discussed above), but it’s a time when you will have the best access to capital. If you find yourself raising and are struggling, consider how you are packaging up the attributes of your company relative to those that are driving the best companies to success in these times.
We talk often at Seedcamp about the true impact of startups in the jobs they create and the economic mobility they enable. No more is that true than for Wise (formerly TransferWise) who today, 10 years after we first invested, take the company public with the first direct listing of a technology company on the London Stock Exchange.
This is a huge milestone for Taavet and Kristo, the team, Estonia, for Europe, for us at Seedcamp, and for the future. Ex-Wisers are fast becoming some of the most sought-after employees and the next generation of entrepreneurs powering the European tech ecosystem.
A lot can happen in 10 years, and we remember all too well that infamous moment when Kristo and Taavet stood on stage at Seedcamp Week London in 2011 and set money on fire to demonstrate what, in their eyes, was happening every time people tried to transfer money abroad. Their compelling storytelling, clear mission and genuine desire to transform the lives of their customers has been a constant from the beginning. We see it today in the transparency with which Kristo has shared his personal journey and learnings from the listing on Twitter; how the team has welcomed customers to become shareholders as part of OwnWise and by the incredible milestone of helping over 10 million people worldwide move £5 billion across borders each month.
From two Estonian co-founders in 2011, to over 2400 Wisers from over 90 nationalities in 2021, we’re proud to have played a part in seeding and supporting this journey. What’s even more inspiring is the part Taavet, and the founding Wise team have played in the Seedcamp journey. We’ve only seen the tip of the iceberg when it comes to the value Wise is adding to the world, and the Seedcamp Nation is a prime example.
A defining characteristic of the Seedcamp Nation is the power of the network and the tangible impact of the pay it forward spirit demonstrated by the founders, operators and investors that we call family. The very first Seedcamp week in 2007 featured Skype’s first employee, Taavet Hinkrus, who shared his wisdom with the next generation of startup founders. Taavet has contributed to our mission of helping founders build the breakout businesses of tomorrow long before he was a founder himself. Four years later, he joined another side of the Seedcamp family with his friend and co-founder, Kristo Käärmann. Fast forward another decade, and members of the Wise Mafia are founders, mentors, EIRs and even investors in the Seedcamp Nation.
Wisers past and present play an active part in the Seedcamp Nation and vice versa. We supported their global ambitions, providing the referral letter for their first employee to set up in the US. That employee was none other than Joe Cross, former Global Head of Marketing and PR current Expert-in-Residence at Seedcamp – it’s great to see this come full circle. Joe has used the opportunity seized, and lessons learned in those early days to give back, sharing growth tips for scale, and mentoring our founders on a one-to-one basis.
Joe is not the only one, over the years we’ve had more senior Wisers share their time and expertise in Seedcamp Nation. Special thanks to Nilan Peiris, VP Growth who opened our Product Summit in 2019, and Sharon Anne Kean, Senior Product Director who shared tips on Hiring Product Managers at Product Summit 2021.
The impact of Wisers is felt on both sides of the table. Other Wisers have emulated Taavet himself, taking the global ambitions and lessons learned at Wise to create their own companies. We’re proud to have backed TaxScouts & Salv, and are confident more breakout founders are on their way. Taavet is an investor alongside us, and is doing the same thing with a fellow Seedcamp founder, teaming up with Sten Tamkivi (founder of Teleport) to launch an investment firm (which is definitely not fund).
We love seeing founders build not only great products but helping to build great people and Wise is one the best examples. They have done this with their customers and with their employees. From Seedcamp Week, to our infamous US roadshow (returning in 2022), to the Summits and socials we hold to ensure our founders know they are in good company. Wise is a brilliant example of what can happen when people from any background and the right drive are given the tools and resources needed to level up and fast. The impact Wise has had on the Seedcamp Nation alone is incredible, but the impact they continue to have on the wider ecosystem is phenomenal. We can’t wait to see what comes next.
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