How We Bootstrapped A $1.2M/Year White-Label Payment SaaS
Hello! Who are you and what business did you start?
My name is Vladimir Kuiantsev. I’m a Managing Partner of the Netherlands-based company Akurateco, a payment software provider for fintech companies. A payment orchestration platform, or white-label payment gateway, is a cloud platform for two main categories of entrepreneurs:
- Companies that view payment processing as a profitable business.
- Online merchants for whom payment processing is a monetization tool, the effectiveness of which directly impacts their revenue.
Since our launch at the beginning of 2020, we have been growing fast. The number of transactions grows exponentially every month, which is normal for a platform that emerged less than two years ago. Last month we reached 1 million transactions. Today, Australia is the only continent where we do not have any clients. We receive recurring payments from 20+ clients every month. Average recurring revenue from one client is about 5000 euros.
Our headquarters is located in Amsterdam, with two regional offices in Tel Aviv and Lisbon, and a Research & Development office in Kyiv.
What's your backstory and how did you come up with the idea?
Our company has a very interesting backstory. All our founders are, in one way or another, connected to payment processing and have crossed paths with each other in various projects over the last 20 years. The idea for launching this service was born and actively discussed in 2016. There was even a financial model and action plan for code development prepared, but at the time the project was left on the paper. However, the visionary and mastermind behind the project didn’t abandon the idea, and from 2018 to 2020, his team worked on creating the software and deploying the infrastructure. When the minimum viable product (MVP) was ready, we reconvened and agreed to launch the software into commercial operation.
It was absolutely clear to us that global merchants need a more advanced and sophisticated tool to manage their payment processes. Being a PSP by ourselves we perfectly understood the pros and cons of this kind of service. Therefore, we developed a platform that provides the maximum level of flexibility to our clients and accommodates their need to grow fast without having to invest significant money into the development of the payment solution.
Listen to your intuition, follow trends, learn daily, and talk to interesting people. Somewhere at the intersection of these activities lies your big idea that can become a successful business venture. Take action!
Take us through the process of designing and prototyping your software platform.
The design and development process can be summarized as follows:
First, the main business requirements were put on paper by the product owner.
Then, according to these requirements, the software architect defined the programming languages, frameworks, and technologies necessary for the creation of the software.
A DevOps engineer also took part in the design, providing recommendations for an infrastructure and technology stack that are easily scalable and maintainable under rapid growth.
A security officer ensured that the requirements for the security of data storage and transmission comply with the Payment Card Industry Data Security Standard (PCI DSS).
The viability of the idea was apparent to us because we spent the last 15 years developing payment service providers (PSP) and perfectly understood how this business worked from the inside, what daily problems need to be solved by such companies, and what technical functions are of the highest importance. Therefore, we understood what features the MVP must contain to interest potential clients. We decided to improve the rest of the functionality along the way, based on the most frequent requests from our customers.
After the MVP was ready and thoroughly tested, it was time for early customer integration. Finding our early customers wasn’t a “super tough” process. We found those with whom we had the most trusting relationships among our network. I’ll explain why.
A processing center is a large-scale software product with numerous interdependencies, a security system, and a complicated infrastructure. The commercial launch of such platforms is always associated with a certain number of bugs, and we counted on our closest clients to be less meticulous about possible glitches at the very first stage of the system. Luckily, our first clients never faced any serious problems.
Describe the process of launching the business.
We didn’t have a particularly grandiose launch partly due to the strict quarantine all over the world. We quietly notified our closest network, turned on our paid advertising, and began PR activities on specialized websites and social networks. Today, our main channels for attracting customers are:
- Paid advertisement - 40% of new leads
- Mailing lists and databases - 20% of new leads
- LinkedIn - 15% pf new leads
- Personal network of the team - 15% of new leads
We had a fairly old-school website, but the search engines knew it well, which brought us a certain amount of organic traffic. At the start of the year, we decided to update it to make it look more presentable. Unfortunately, we didn’t consider all the important nuances of transitioning to a new website, which led to a significant decrease in the number of organic visitors. Our current priority is restoring the former traffic.
In addition, we focused on PR activities that emphasize educational content. Within the e-commerce market, many companies accustomed to working with a PSP don’t realize that there is a different, more effective way to organize the processes related to receiving payments.
On the other hand, many entrepreneurs who want to try themselves in the fintech industry are hesitant to do so. One of the reasons stopping them is the substantial upfront investment in product development and security certification. For this group of people, we write expert content about the principles of the sharing economy, what white-label solutions are, and how they work.
Comparative calculations of financial models also work well: A) I use a white label solution, or B) I develop a product on my own. Essentially, it’s a choice between capital expenditures (CAPEX) and operating expenses (OPEX). Every entrepreneur chooses a more suitable option for themselves, we’re here to simply remind them about the existence of a more effective alternative to the conventional method of organizing their business.
Since launch, what has worked to attract and retain customers?
The selling process is as follows. After information about a potential customer gets into our sales funnel, the sales staff opens communication with them to identify their requests and needs. In the case our product suits the client, we demonstrate the system from the inside and select the optimal configuration necessary to perform the tasks laid before them. Often, a client has specific requests requiring customization of our platform, calling for additional development.
In such cases, we jointly formulate business requirements, which then become the foundation for the terms of reference (TOR) and are transferred to the development department. Thus, we help our clients accomplish their business objectives whilst continuously improving our platform.
One of the competitive advantages that help us retain clients is our strong emphasis on the quality of customer support. We try to build a personal relationship with the clients and promptly respond to their requests. We believe that for business-to-business (B2B) sales of any company, there comes a time when the recommendations of existing, satisfied partners become the main channel of customer acquisition. Accordingly, our clients receive more than just technical advice on the operation of the platform – we strive to bring our support to a higher level.
Having over 15 years of experience in the processing business, we can use our knowledge to assist our clients in achieving their current business goals. “Which payment methods are relevant to a particular region? How to effectively negotiate with the acquiring bank? What documents are needed to pass compliance control? How to communicate with the local regulatory authorities? Who to contact to obtain a license? How to work with chargebacks effectively?” This is just a fraction of the information that we share with our clients daily to help them be successful in their business ventures.
How are you doing today and what does the future look like?
Our business is self-funded by our founders. The goal is to break even by the end of the Q2 2022, after which we will seek out external investments to rapidly scale up. The long-term goal for the next 5-7 years is to achieve a capitalization of $100+ million.
Today, we have a consistent growth of our client base, which is reflected in our revenue growth. After finishing our first full operational year, we will be able to set growth targets for key performance indicators (KPIs) for the next few years. The main KPIs we are currently tracking are:
- Funnel transit time or the amount of time it takes for a prospect to become a buyer, now averaging at 80 days.
- Cost per qualified lead, currently $120.
- Prospect to qualified lead conversion rate, currently 8%.
We track these indicators dynamically and strive for their improvement, regularly planning pertinent activities.
We presently have over 50 employees, the greater half of which is part of the technical team. The labor market in the IT industry is overheated right now, which is why we conducted several planning sessions for the recruitment of technical staff at the start of 2021. As a result, we filled around 20 vacancies within the first half of the year. All in all, the core of the team has been formed for the main verticals of the company. We will be planning various team-building and development activities next year.
Process-wise, we hold several weekly meetings on key activities: two technical meetings, two business meetings, one marketing meeting, and one product development meeting. The founders, as well as the key members of the relevant teams, try to take part in all these meetings.
Never get disheartened. Start-ups always come with highs and lows. One day, everything is going great, and you are ecstatic. Then, something goes wrong, and you are already envisioning a disaster. You need to keep a cool head and do your job.
We are a Tech-Fin company, at the heart of our business is a technological product that provides financial transaction processing. The stability and resilience of this processing center are key for our clients. We guarantee a 99.9% uptime in our Service Level Agreement (SLA). Our platform has a modern architecture, with microservices packaged in containers. We use services that are considered mainstream, such as Docker, Kubernetes, and ELK.
Through starting the business, have you learned anything particularly helpful or advantageous?
We initially decided that, in many cases, it’s not worth reinventing the wheel, given that many problems have already been successfully solved by others before us. Instead of wasting time on the development and maintenance of heavy functions, we use off-the-shelf solutions offered by other companies, which come in the form of Software as a Service (SaaS).
Development and testing are carried out using the Symfony, Vue.js, TypeScript, and git frameworks. High-quality code is achieved using the SOLID design principles and automated tests such as phpmd, phpcpd, phpcs, phpstan, eslint, etc. The quality assurance analysts use Behat and Selenium for testing.
Our infrastructure diagram looks like this:
We have a plan for refining this infrastructure. The DevOps team is currently moving according to this plan, and we track their progress at our weekly meetings. You can read about our technological infrastructure in more detail here.
The processing of sensitive and valuable banking information of our clients is integral to our business. Therefore, another key aspect of our work is maintaining PCI DSS compliance. Vulnerability scans are performed by approved scanning vendors every quarter. Additionally, a comprehensive audit is performed annually, which checks and certifies all the infrastructure and software updates that we have implemented in the last 12 months according to the PCI DSS Level 1 requirements.
To summarize, infrastructure, product development, marketing, sales, HR, and finance are the key activities that keep us on our feet today and give us confidence in our future.
What platform/tools do you use for your business?
The technical processes are controlled and monitored in Jira and the support for internal and external clients is carried out via Jira Support Desk. We move leads down our sales funnel using Bitrix24, which also serves as a data source for mailing lists and generating various marketing effectiveness and sales reports. We use Slack to communicate with the team and keep in contact with our external clients using e-mail and instant messengers.
What have been the most influential books, podcasts, or other resources?
We continuously keep an eye on industry-leading mass media like Finextra and TechCrunch. Also, we are using SaaStr as a source of insights on go-to-market activities.
Advice for other entrepreneurs who want to get started or are just starting out?
I advise those who have already started their projects to never get disheartened. Start-ups always come with highs and lows. One day, everything is going great, and you are ecstatic. Then, something goes wrong, and you are already envisioning a disaster. You need to keep a cool head and do your job. Pick up the phone and make the calls. Sit down at the computer and write the code. The results will come. You need to be able to look at the situation from the outside. “Am I moving in the right way? Is this the shortest path? Am I surrounded by the right people?”
To the entrepreneurs who haven’t started their business yet, I encourage you to listen to your intuition, follow trends, learn daily, and talk to interesting people. Somewhere at the intersection of these activities lies your big idea that can become a successful business venture. Take action!
Are you looking to hire for certain positions right now?
We are in the ongoing process of searching for new employees. Currently, we have several open positions. The full list is available here.
Where can we go to learn more?
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Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
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