20VC: Scaling to a $1.3Bn Valuation While in Stealth, The Power of Different Network Effects Within Payment Platforms & How To Leverage Your Board and Investor Base for the Most Value with Matan Bar, Founder & CEO @ Melio

Matan Bar is the Co-Founder & CEO @ Melio, the company that provides the simplest way to pay vendors and contractors. To date, Matan has raised over $254M for Melio from the likes of Accel, Bessemer, Aleph, Coatue and General Catalyst to name a few. Prior to founding Melio, Matan Bar was Head of PayPal Consumer Product Center and before that was a Head of Product and GM @ eBay in their Israel Innovation Center. In Today’s Episode You Will Learn: 1.) How Matan Bar made his way into the world of startups and came to found one of the fastest-growing companies today in the form of Melio? 2.) What is the single most important thing in a financial transaction business? How does Matan think about the balance between optimising for transaction volume vs revenue? What does Matan believe are the core network effects within payments businesses? Why do most opt for closed network effects? How is Melio different? 3.) What have been some of the biggest challenges of adding 170 people in one year? What breaks first? What needs to be in place to ensure the culture can scale with the headcount? How does Matan structure the leadership team to manage this hyper-growth? Has Matan struggled with self-doubt in his leadership during this hyper-growth? 4.) What specifically has Melio and Matan done to achieve a 49% female to male ratio within the company? What works when it comes to implementing diversity at scale? Where do so many people make mistakes? What specific strateies have allowed Melio to hire some of the best female engineers? 5.) How does Matan most like to interact with his board? How does he determine the advice to ingest vs the advice to reject? What have been some of his biggest lessons when it comes to successful board management? Where do many first time founders make mistakes when it comes to investor value add and extraction? Item’s Mentioned In Today’s Episode Matan’s Favourite Book: The Unbanking Of America: How the New Middle Class Survives As always you can follow Harry and The Twenty Minute VC on Twitter here! Likewise, you can follow Harry on Instagram here for mojito madness and all things 20VC.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Harry Stebbings?

  Welcome back. This is 20 VC with me, Harry Stebbings. And on Monday, we released this incredible episode with Michael Eisenberg at Aleph. It's really one of my favorites. And so if you haven't checked out, it really is a must. But in the episode, he discusses his seed investment in Melio, one of the fastest growing companies of our time and recently becoming a unicorn. And so with that, I just thought I have to have the Melio founder on the show. And so I'm thrilled to welcome Matan Bar, co-founder and CEO at Melio, the company that provides the simplest way to pay vendors and contractors. To date, Matan has raised over 254 million for Melio from the likes of Excel, Bessemer, Aleph, Co2, and General Catalyst, to name a few. Prior to founding Melio, Matan was head of PayPal Consumer Product Center, and before that was a head of product and GM at eBay in their Israel Innovation Center.

• 0:43Harry Stebbings?

  I'd also though want to say a huge thank you. This schedule was a big team effort from Julian Beck at Excel, Michael at Aleph, and Michael at Co2. Huge thanks for that and really did mean a lot to have your help there. But before we dive into the show today, did you know that more than 80% of US public stock is owned by just 10% of Americans? This divide is even greater in the private markets. Carter makes it as easy to issue equity to your employees as it is to issue payroll. And for employees, as easy to accept it too. More than 16,000 companies issue equity to their employees through Carter. Whether you're just getting started or getting ready to go public, the team at Carter can help. Check them out at Carter.com.

• 1:19Harry Stebbings?

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• 1:59Harry Stebbings?

  With 50-plus years working with VCs, they help VCs form and manage funds, make investments, and handle the myriad of issues that arise throughout a fund's lifetime. So to learn more about the number one most active law firm representing VC-backed companies going public, head over to Cooley.com and also check out CooleyGo.com. But that's enough from me. So now I'm very, very excited to hand over to Matan Bar, co-founder and CEO at Melio.

• 2:28Speaker 01

  You have now arrived at your destination.

• 2:31Harry Stebbings?

  Matan, it is such a joy to do this. As I said, I've heard so many great things, both from Michael at Aleph and from Gideon at Excel. So, thank you so much for joining me today.

• 2:39Speaker 02

  Of course. Thanks so much for having me.

• 2:41Harry Stebbings?

  Not at all. The pleasure's all mine, but I want to kick off with some context. So, I was chatting to Michael before the show, and he said, "Go back to traversing down Rothschild Boulevard, between your office and Michael's." How did you fall upon the Emilio idea, and what was that founding moment?

• 2:55Speaker 02

  That's a great story that I like reminding of. I know Michael for a while. I remember meeting him during my PayPal days. Before starting Emilio, I was with PayPal, leading its consumer payments business globally. Basically, everything related to paying friends and family using the PayPal app. Some parts of Venmo were also owned by my team, but whether it's paying back for coffee using the PayPal app, or sending money to your family abroad, this was part of my team. You know, I was super passionate about consumer payments and was experiencing the digitization of how consumers pay other consumers. Consumers around the world were shifting from cash to mobile payments. We were at the right time, at the right place with PayPal and my teams across San Jose and Tel Aviv, and we saw this crazy

• 3:39Speaker 02

  growth. And so, after learning a bit about how small businesses pay other businesses, like how a business pays its suppliers, I was shocked to discover that the digitization that I've experienced between consumers hasn't happened yet in terms of how a business pays another business, or how B2B payments are being done. And I remember this one number that I shared with Michael, that I read the Federal Reserve research that indicated that there are around $18 trillion of payments that are still transferred through paper checks between businesses in the US. And that was, I think, the trigger for me to start thinking about Emilio and the trigger for my conversations with Michael. The fact that

• 4:21Speaker 02

  B2B is still very much based on paper. Paper invoices, paper checks, and that was very different than the world that I've lived in, which is consumer-to-consumer payments.

• 4:32Harry Stebbings?

  I mean, it makes me slightly chuckle to think about checks. I don't think I've written a cheque in my life, but I do have to ask, you know, if we take that one step further, then you have that idea and you go shit, there's no brand for ACH. You then think about kind of building out the founding team. And Michael told me that this maybe wasn't an obvious process. How did you choose your co-founders and why do you think it was maybe not obvious?

• 4:53Speaker 02

  Yeah, so I'm lucky to have chosen great co-founders, Elan and Zeev. I think we've decided to work together in terms of our shared values. Like, we decided to work together before we had a specific concept in mind. We think like to work with one another. We got along well and I've seen incredible traits with these partners, like resilience, like our ability to manage a debate, which, similar to maybe a good marriage, when you have shared values, marriage is easier. And same for choosing partners to start a new company. So we definitely decided to work together based on shared values. And luckily, these two are the smartest people that I know, so that also helps.

• 5:35Speaker 02

  In terms of the concept itself, we just thought about different directions, mostly within fintech, because that's, you know, the world that I came from and I learned the importance of money to people and businesses. So our focus was mostly around fintech, but there wasn't a specific idea in mind.

• 5:50Harry Stebbings?

  In terms of the business itself, you know, I was chatting to Michael about his excitement around Melio itself. And he said, you've got to ask Matan, what's the most important thing in a financial transaction business?

• 6:01Speaker 02

  That's a great question. One thing is hard to pick. There are two things that I think are top of mind for me. One is ubiquity. Any successful payment system is one that can be used by as many people as possible, anywhere, anytime. So if you think about, by the way, a paper cheque, one of the great things about a paper cheque is that anyone can write a cheque and anyone can accept a cheque. Even if you don't have a bank account in the US, you can still accept a cheque. Like, you know, it's the most ubiquitous payment element and ubiquity wins. Like Venmo, PayPal, Zelle, Square Cash, all these payment networks, they became ubiquitous around the US as more and more people started using them. And that's how it's winner takes all or winner

• 6:44Speaker 02

  Takes most, I guess, with these types of payment networks and it's due to the importance of ubiquity. The second thing that I'll say that is like, I would say, competing with ubiquity is choice. Choice is critical for any payment system. Consumers and business owners both like having choice in terms of how to pay and when to pay. People like paying with a debit card, credit card, bank transfer, wire, paper check, virtual cards, real-time payments. There are so many types of payment methods that you can use and each has its own disadvantages and advantages. And so providing choice is super important for any payment system, whether it's paper, whether it's Melio and whether it's other payment solutions out there.

• 7:28Harry Stebbings?

  Can I ask, with ubiquity comes volume. And one thing that when I spoke to Michael and the team at Co2 and actually Julian, there was like this constant question, which is how do you think about the balance between volume versus revenue? And where do you land when you think about driving one or the other?

• 7:43Speaker 02

  It's a strategic question that we keep revisiting or debating every once in a while as it really determines the product roadmap, it determines the type of people that we hire, it determines everything. And I think for us or for a company, a young company like Melio, growth is definitely the number one priority. We're obviously a business that aspires to have like great returns for all shareholders and investors. So obviously revenue is top of mind, but the strategy to become a very successful business is to think growth first. And the reason is actually a little bit related to the network effect that I was referring to with Zelle and Venmo and Square Cash.

• 8:22Speaker 02

  I think when you build a payment system accurately, you can actually grow at a super fast pace. Usually within payment systems, when both sides are within the network, the value increases for each of these sides. And so I think enabling or focusing on growth, expanding the network, leveraging or doubling down on the network effect efforts are just, I would say, more important at a phase like ours compared to finding another revenue source. We do have A strategy around our revenue sources and the different values that we can provide our users to also monetize the business. But I think there's a very clear set of revenue opportunities that are shared across payment systems.

• 9:07Speaker 02

  The growth element is unique to Melio compared to other products.

• 9:12Harry Stebbings?

  Can I, as you mentioned there, the network effect, to me, there's actually multiple different network effects on offer here. Because you have also like the data network effect where you could be a business verification system as well, or a risk assessment system as well. You could analyze historical data as to who's failed payments before continuously and kind of build kind of credit ratings and scores even. How do you think about like the different network effects that are on offer to Melio?

• 9:33Speaker 02

  Yeah, so it's interesting because with PayPal or Zelle or Venmo, usually the network effect is driven by acceptance. Meaning if I want to pay a friend using Venmo, in order for my friend to accept the fifty dollars, the friend needs to sign up to Venmo to accept the fifty dollars. So it's a closed network. Once you make a payment to a friend, the friend needs to sign up to accept the payment. That's, I would say, the most natural, basic element for virality for these P two P apps and for many other payment systems in general. With B two B payments and with Melio, it was interesting because we could not force a closed network.

• 10:12Speaker 02

  So when a restaurant owner is paying its, I don't know, fifteen suppliers, electricity company, the fish supplier, we need to make sure that the restaurant owner can pay each of the fifteen suppliers, even if they don't want to sign up to Melio. So we need to make sure that the restaurant can pay the fish supplier, even if the fish supplier only accepts a cheque and doesn't want to sign up to Melio. Otherwise, the value for the restaurant owner that is paying wouldn't be so high if we only force a sign up on vendors in order to accept payments from that restaurant owner. And so we had to act in a different way. We had to make sure we leverage cash flow to encourage network effects. Meaning that when we send the money or send the funds to the fish supplier,

• 10:57Speaker 02

  we encourage the fish supplier to sign up to the network, but we don't force them. So they can either receive the cheque and, you know, Not sign up to Melio ever, or we tell the fee supplier, hey, wanna get paid faster, helping his or her cash flow, sign up to Melio and we'll send you the funds faster. And we have like multiple examples like that, but cash flow is the main driver for network effect with an open network like the one Melio has built.

• 11:23Harry Stebbings?

  Can I ask, one thing I was thinking about is like the transition. Do you see customers transition partially or fully straight away in terms of their payments flows? Does it take a while for them to see the platform in action and then fully shift? Or do they fully shift on day one?

• 11:37Speaker 02

  I think there's an element of trust. Melio is still not a well-known brand like PayPal. Hopefully we will be, but at the moment, there's definitely an element of trust that needs to be built between Melio and its customers. So we definitely see customers test us with a few payments, seeing that the checks actually arrive or the bank transfer actually arrive, no matter how they choose to pay their suppliers. And then when trust is formed, we see a significant increase in terms of the wallet share that goes through the Melio product. So I guess we have like a couple of months where we build trusts with a new customer and then they shift all of their transactions to Melio.

• 12:15Harry Stebbings?

  Totally. No, I see that in terms of that trust building exercise, especially with it being such a core part of their business being cash. Can I ask, you know, it's such an exciting space, but it's also a pretty crowded space. You've got incumbents like Bill.com, you've got more recent players like Rootable. How do you think about competition? How do you view it more broadly?

• 12:33Speaker 02

  Yeah, I think these are great companies that has been extremely successful during the past year, or Bill.com, I think existed for around 15 years. And so these are awesome companies. But I think we decided to focus on a segment that is truly underserved. I would say these tools that you're referring to are less suitable for the segment that we've selected. We basically said, there are so many small businesses in the US. There are different numbers, but let's say around eight million small businesses that are eligible, small businesses for our platform. These businesses, they see the big fancy accounts payable automation solutions as overwhelming to use, as these tools, Bill.com.

• 13:14Speaker 02

  With exchange, all these wonderful accounts payable automation solutions are mostly built for finance professionals like an accountant, a bookkeeper, a finance team, and Melio is targeting these owner operators, these small businesses that do not have an internal finance professional. It's either the owner or a trusted employee that is making the payments. And so I think we've found this market that is truly undersold, these owner operators, small business owners that are not finance professionals. They do not want to become finance professionals and find these other tools to be overwhelming. By the way, even the name of the category, accounts payable automation solutions, the category that we're part of,

• 13:54Speaker 02

  that's such a terrible name for a category, if you think about it, like accounts payable is an accounting term. And automation is this value proposition that probably resonates really well with the CFO of Nike, that manages, you know, tens of thousands of payments. And so automation equals operational excellence. However, a wine shop owner that manages, I don't know, a hundred payments a month, automation is not that big of a deal. Like, it's nice, but it's not a value proposition that will make the wine shop owner shift from something that he or she are so used to, to this new digital tool. What these businesses care about is cash flow, not automation. That's why I guess the simplicity that we've built, combined with our focus on cash flow instead of automation,

• 14:37Speaker 02

  is what resonated, I would say, well with this type of target audience.

• 14:41Harry Stebbings?

  Can I ask you, a tough one that's off schedule, but it's like, how do you think about when's the right time to bring out a next product? You know, a very obvious next product would be lending in terms of providing that capital ahead of cash flow. And you have all the data to provide it relatively risk-free. How do you think about when's the right time to build out ancillary products?

• 14:58Speaker 02

  Yeah, we keep thinking about the right approach for this, but definitely offering credit is extension for our payment system. PayPal offered PayPal Credit and Square offered Square Capital. Like, it is, I would say, a very integral part to a high engagement payment system. So we're definitely thinking about it. I think we're most likely going to partner with a company that is doing credit well in order to provide this service as. Our focus is to become the best B two B payments platform and user experience. And that's a lot of work already. So getting into credit underwriting and having funds on our balance sheet is something that is probably relatively complicated or defocusing in terms of our product strategy.

• 15:42Speaker 02

  So this is probably a partnership rather than a build decision, but definitely something that we're aiming on building and have concrete plans on.

• 15:49Harry Stebbings?

  I mean, speaking of kind of like product expansion and also just like the market available in the US, as you said, eight million. It's such a big market to go after and, you know, you need to raise money to go after such a big market. You raised a hundred and forty four million dollars. And the interesting thing for me is you remained in stealth until that moment. And so I have to ask here, how would you describe your fundraising strategy? And why did you decide to stay in stealth for so long?

• 16:11Speaker 02

  There are, I think, less of a strategy. If I'm being like fully transparent, like I can't say that we had like a very consistent fundraising strategy, but more of a setting goals and understanding the resources that we need to get to these goals and then deciding whether to fundraise or not. I think we grew a lot faster than we've expected over the last year. We realized that the goals that we've set beginning of twenty twenty are completely irrelevant and we can do a lot more. Can capture more of the market, but we would need more engineers, we would need more marketing, we would need more salespeople. So we started, I remember like preparing a this very simple model with the new goals that we've set.

• 16:53Speaker 02

  And we suddenly realized that we need a lot more funds in order to hire the team that we want to hire. And so that was a trigger for us to say, okay, we need to be or we can be more aggressive. And now is the right time to raise the funds and that's why we did it. That's what happened in August when we raised our round C, but then we continued to accelerate our growth. And then the goal that we've set back in July already seemed too moderate. And we thought to ourselves, hey, we can grow a lot faster. We can add a lot more value to our customers than what we do today. So we decided to raise money again in order to make sure that we can expand the team at the pace that we want to expand. We grew from thirty people in January twenty twenty to two hundred this January. So that

• 17:34Speaker 02

  Couldn't have happened without the additional fundraising. I think we would be afraid to take this type of risk.

• 17:40Harry Stebbings?

  Can I ask, you mentioned a hundred and seventy people within a year. What are the biggest challenges of adding one person every other day, essentially?

• 17:47Speaker 02

  Yeah, it's a crazy journey, which we love. The challenge is, I guess I won't say anything unique, but the challenge is to maintain the culture. When we were thirty people, I remember telling our team, guys, the culture of this team, of this company, will be dictated by your personalities. The thirty people that joined us, their personalities are the core of the company's personality. You know, it's like taking a baby versus elderly men. I can easily affect my one-year-old baby's personality. It would be very hard for me to affect my eighty-two-years-old father's personality. He's already set in terms of his values.

• 18:28Speaker 02

  And I think it's also true for companies, like when you're young, when you recruit the first thirty, the first one hundred, the first two hundred, this is the time to shape the values and the norms that the company will have, whether it's how you talk in meetings, whether you're inclusive or not, whether you're diverse or not, it's very hard to change this when you're five thousand. It's possible, but it's just a lot harder.

• 18:51Harry Stebbings?

  Can I ask you the question, which is like, you know, you came from large organizations, like you said there with PayPal. Escaping from thirty to two hundred within a year, it's a lot for a leader to digest. How do you deal with like self-doubt as a leader?

• 19:04Speaker 02

  Luckily, I have a great leadership team, so I trust our leaders with many of their decisions and consult with them on an ongoing basis. So I think working as a team or having a strong leadership makes things easier. Again, it's a very obvious insight, but a very true insight. So I think my two co-founders, Elon and Ziv, and the leadership that joined us, our VP Product, VP Business, VP Growth, like all these wonderful folks that decided to join us, this makes the journey easier. I think without a strong leadership, we couldn't have grown from thirty to two hundred. And that's a very important foundation that luckily we set at an early.

• 19:44Speaker 02

  Early phase, but we're still on it, like we're missing a lot of new leaders. So it's an ongoing task, obviously. And so I think self doubt, having a strong team to consult with, we do have a naturally inclusive culture. So we do make decisions, uh, we do have open, honest and direct conversations about different dilemmas. So that just helps with being fully aware and just feel comfortable with the different doubts that we have obviously on a daily basis.

• 20:12Harry Stebbings?

  You said about the leadership team now, I am intrigued because you know, I spoke to Michael and Julian before and they both said, actually for a long time, there was a lot of direct reports on your plate, to put it mildly. Like, how did you move from a culture of direct reporting and direct ownership really by you to a culture of delegation and delegated control?

• 20:30Speaker 02

  That's one of these shifts that I think different scaling books talk about, right? Whether blitzscaling, the hard thing about hard thing, like every book that talks about hypergrowth companies, I mean discusses. It always feels like these books were written about us, like all the challenges of generalists that were good until a certain point. And then we need specialists to take us to the next level, like all the points that are really mentioned in every book that is about hypergrowth companies, we're there, we check the box on each of these challenges. There isn't like a one secret that worked well for us. I think when we scaled the team, we made sure that it is very much aligned with the company's goals.

• 21:13Speaker 02

  And so we always based on need and not based on recipe. So we didn't like follow a specific best practice, but we have different cadences to evaluate our organizational structure. Like we meet every month, we have an H R review to see, evaluate specific performance topics and just trying to understand whether the structure that we have is the right one for the goals that we're trying to set. And it's not like every month we're changing the structure, but it is a process and a conversation that this cadence allows. And then helps us make decisions in a timely manner to change structures of engineering teams or growth teams to be ahead of the next step. Not make the organizational change six months late.

• 21:58Speaker 02

  This cadence, I think, is one best practice that really helped us in doing that.

• 22:02Harry Stebbings?

  You said about kind of being ahead of the next step there. Often, boards are kind of told of the value for them of being like ahead of the corner or being able to provide advice with the wisdom that they've seen beforehand. I'm intrigued. When we think about your board, there's some very opinionated characters on the board, which is always great. But I'm like, wanna start with one from Michael, actually, from Alaf, who's obviously on your board. And he said, how do you try and use your board most effectively today? Let's start there.

• 22:26Speaker 02

  Yeah, so luckily, we have a few incredible investors that are very different from one another. From our seed days to today, our investors are very different in terms of what they care about, what they focus on. I think with startups, everybody talks about all the right things all the time. But it's very hard to get the external view on what are the key priorities? What is the most important thing at the moment? There are so many things happening at any given time. And I think what we saw with our board of directors is that in terms of understanding focus areas or getting an external perspective from folks that are not in the day to day, saying, hey, I think there isn't enough focus on X.

• 23:10Speaker 02

  Or you're putting too much focus on Y. I think these are great conversation starters. And then we follow up and we start thinking whether this is correct or not correct. But many times, I can give you an example. We had one investor that told us, hey, you're not diverse enough. What's going on? This is not a way to build the company. And we talked about the product and features and UI. We didn't talk about diversity when we were 10 people. But that like caught us and we said, what is going on? Today, we're 200 people, 49% women, 51% men. This was the seed for us to become a truly diverse company. Most of our leadership are women. And so I really think that we call ourselves, said, we need to change this now. And we started creating equality of opportunity for women engineers.

• 23:53Speaker 02

  It obviously then led to equality of outcome in terms of our actual headcount. So I think it's the board that gives you this external perspective. When you have the right board members, they usually give very good. Good advices and very good pointers to what to focus on and that has been super helpful.

• 24:09Harry Stebbings?

  And listen, I do wanna touch on the diversity because it's too interesting not to. Before we move to that though, I do have to ask, you know, in terms of the advice that they give, there's the challenge of like, you know, what to ingest versus what to not ingest. How do you think around what advice when listening to your board that you trust your instincts on and actually ignore versus what to ingest and act upon? How do you kind of debate between the two?

• 24:30Speaker 02

  Yeah, there are, I think, specific areas that we get more advice on than other areas. And it depends on the founding team. So for example, we're three founders that are very product oriented, product, user experience, design. And so I think we rarely hear feedback on product. The board is not interested to give us feedback on product. I think they feel confident and they are right. See, this is an area where we have enough resources that we consult with and we have enough experience to be good on product. But for example, scaling a team or which leaders to hire or which type of CFO should I hire? This is not something that I had experience with, you know, at PayPal or eBay or at my first startup that got acquired by eBay.

• 25:14Speaker 02

  So there are certain areas where our investors just have seen a lot, they've seen a lot of mistakes. And so there the feedback is priceless. But you know, like any team, you need to make sure you have a good set of investors and they give good advices and not bad advices. And their feedback is accurate. So luckily for us, the feedback is accurate. But there are certain topics like which CFO to hire or when is the time to hire a CFO? You know, these are questions that I found super helpful to discuss with our board.

• 25:42Harry Stebbings?

  Before we dive into the quickfire, this wasn't on the schedule, but forty nine percent in terms of female to male ratio. I mean, that's pretty incredible. So my question to you is like, what have you done that others haven't to make you succeed where others haven't?

• 25:55Speaker 02

  So first, we made a real effort. I think everybody talks about the importance of culture. Everybody talks about the importance of diversity, but diversity is very easy to measure. Gender diversity and race diversity. And so we just worked hard to create a real equality.

• 26:14Speaker 02

  Of opportunity. So we didn't aspire to get to fifty fifty. I don't think that's the right way to do that. I think the right way for us was to make sure that, for example, with engineering, women engineers can find Melio or be comfortable joining Melio, handling different concerns that might be relevant for female engineers, that might not be relevant for male engineers. For example, many young mothers after a maternity leave are very concerned to go and start working at a startup. Because a startup is considered to be a hectic environment and so a corporate might be a more comfortable environment for someone after maternity leave. And so we created programs to create a lot of flexibility

• 26:57Speaker 02

  for young mothers that came back after maternity leave, so that they can actually have a very balanced graduation into back to work. And we did same with paternity leave as well, but I think we found that especially women after maternity leave are super concerned about getting back to startup more than men. And it's true for Israel and also the US. So we created this program to encourage that. We also became very active in terms of different conferences and events that are oriented or organized for women engineers and introduced our company and the different traits and culture values that we have. And just being active led to having a more equal outcome

• 27:40Speaker 02

  than other companies, maybe in our space or in general. But equality of opportunity, that's the key.

• 27:46Harry Stebbings?

  As I said, I really wasn't aware. Despite my many hours of research, I wasn't aware about the forty nine percent. So that's incredible and wonderful to hear. I do want to move into my favorite though, which is the quickfire round, Matan. So I say a short statement and then you hit me with your favorite thoughts. How does that sound?

• 27:59Speaker 02

  Sounds perfect.

• 28:01Harry Stebbings?

  Okay, so what's the must read book for you and why?

• 28:04Speaker 02

  I guess one of the books that influenced me most is The Unbanking of America by Lisa Servon. I think that's one of the books that emphasizes in the clearest way the importance of financial inclusion and democratization of financial services. That greatly influenced me to work at fintech and making money better as. I understood from this book and from working at PayPal that making money better really changes people's lives. Whether it's making it faster, cheaper, more efficient, more accessible. It's just crazy how many people are not having access to very basic financial services. So fintech helps there.

• 28:43Harry Stebbings?

  What's the hardest role to hire for today?

• 28:44Speaker 02

  Any senior leader is always hard, regardless of the profession itself, whether it's marketing or product or sales. Having a leader is someone that our team is going and following their values, following the way that they work. And so hiring great leaders is just scary. And that's one of the biggest challenges for us and any other startup, not because of the expertise and skills, but because of the values and the leadership style.

• 29:12Harry Stebbings?

  In terms of values, this is a personal and a tough one. What three traits would you most want your children to adopt?

• 29:17Speaker 02

  Yeah, it is a tough one. I think being humble, I think it's something that is very important. Being honest, like real honest, honest is not a yes or no, there's a spectrum for honesty. So being like really honest and just being a learner, like a learn it all, not a know it all. I think these are three important traits.

• 29:35Harry Stebbings?

  Which leader do you most look up to and why?

• 29:37Speaker 02

  There's an athlete that I admire, Roger Federer, the tennis player. I just admire the guy and his style. I think his style is effortless, like for people that watch tennis, Federer seems like he's never sweating. He's never running, he's never making an effort, but he's always there, reaching the ball on time. And it's because he's super accurate and super skilled, that's the perfect execution style, effortless. When things look effortless, it means that you're just, you don't need to work hard, you just need to be very accurate. And reaching this level of execution is just incredible. He achieved that with tennis, like we tried to achieve that with product, but I really admire that.

• 30:14Harry Stebbings?

  I've never loved a Toblerone advert quite as much as Roger Federer's Toblerone advert either. So I'm totally aligned to you there, the elegance is just another level. But ultimate one, and don't worry, this is just me and you, so you can totally feel comfortable and safe here, Matan. Who's the best board member that you've worked with and why?

• 30:29Speaker 02

  It's hard for me to pick one. I think we prioritized the type of. People that our investors are over valuations. We turned down higher valuations than the ones we took from our current investors on every round, really. Like on our A, we had a higher valuation from another VC, on our B, on our C, this last round as well. We always received higher valuations, but we picked the investor that we want to work most with. I'm just liking to have like really good people around the table. Hard for me to pick one, really. It's a hard one.

• 31:01Harry Stebbings?

  It's asking you to pick your favourite child. I get it. It's tough. Final one. What are the next five years like for you and Emilio? How big could it be and what's that picture?

• 31:08Speaker 02

  Our mission is to keep small business in business and we do that with simple B two B payments that maximize cash flow and minimize busy work. And I think the next five years is when the eighteen trillion or whatever number you choose of some research that says eighteen trillion dollars of paper checks, they will decrease to zero. There's no doubt about it. B two B will follow the digitization of C two C and online retail. It's a matter of who will do that, like who will drive this digitization, whether it's Emilio, our competitors, new competitors that we don't know of yet, that haven't started yet. And so we're working very hard to fulfill our mission to keep small business in business

• 31:47Speaker 02

  and become the leading B two B payments platform in the US. Digitization will happen and Emilio is there to work hard to accelerate that.

• 31:55Harry Stebbings?

  Matan, as I said, I've heard countless hours of Julian's love for you and Emilio. So this was so much fun to do and I can't thank you enough for joining me today.

• 32:03Speaker 02

  Of course. My pleasure. Thanks so much for the great conversation.

• 32:08Harry Stebbings?

  I mean, the only feeling that I leave that interview with is, damn it, I wish I was on that cap table, but Matan is building such a special company with Emilio. Again, I do want to say huge thank you to Michael Eisenberg at ALF, to Michael at COTU and to the very special Julian Beck at Excel. Huge thanks for that schedule input and it really wouldn't have been the same without it. But before we leave you today, if you'd like to see more from us behind the scenes, you can on Instagram at H Stebbings nineteen ninety six with two Bs. And most importantly, before we leave you today, did you know that more than eighty percent of US public stock is owned by just ten percent of Americans? This divide is even greater in the private markets. Carter makes it as easy to issue equity to your employees. As it is to issue payroll and for employees as easy to accept it too. More than sixteen thousand companies issue equity to their employees through Carter.

• 32:53Harry Stebbings?

  Whether you're just getting started or getting ready to go public, the team at Carter can help. Check them out at Carter.com. And then another incredible product you have to introduce is SecureFrame. SecureFrame helps companies get enterprise ready by streamlining SOC two and ISO twenty seven thousand and one compliance. SecureFrame allows companies to get compliant within weeks rather than the painful months that is today. Join companies like Stream, Husura, Benner Pass and unlock more sales with SecureFrame. And twenty VC listeners get 10% off at SecureFrame.com/20VC. And finally, I've always been a big history fan and so I want to talk about Cooley, the global law firm built around startups and venture capital. Since forming the very first venture fund in Silicon Valley, Cooley's formed more venture capital funds than any other law firm in the world.

• 33:38Harry Stebbings?

  With fifty plus years working with VCs, they help VCs form and manage funds, make investments and handle the myriad of issues that arise throughout a fund's lifetime. So to learn more about the number one most active law firm representing VC-backed companies going public, head over to Cooley.com and also check out CooleyGo.com. As always, I so appreciate all your support and I can't wait to bring you some fantastic episodes next week.