How Grain Financial Technology CEO Aharon Navon grew Grain Financial Technology to $1.4M revenue and 2 customers in 2024.

guys common X Banker uh he's raised 19 million bucks hoping to help folks mitigate hedging risks for example if you're selling a hotel bed in California to a Mexican travel agent who needs to sell it to Mexican residents and pesos he'll help you hedge that risk this risk can be significant with the Euro changing for example the past two weeks eight percent against the dollar it's a massive Market his hope is to get this product live in the next six months and process you know caught a billion dollars of hedging volume next year of which she'll make 20 to 30 bips on so call it two to three million bucks and revenue already has a team in place of 20 people looking to scale now with this new money hey folks my guest today is Aaron Naman as a former head of Barclays CMA FX trading platform the co-founder of Israel's largest FX hedging non-bank Aaron brings over 20 years of FX and risk management exposure to his current company which is an embedded cross-currency solution called grain Finance dot Co Aaron you ready to take us to the top yes all right double this down for our non-finance people what does that mean in a simple sentence what hedging for smes what you do why people pay you that's I'm not sure this will find out in the future but basically uh have over 20 years of experience providing uh hedging solutions to a lot of companies small bigs uh private individuals High net worth so I think you know uh we acquired some experience and that's what maybe I'm what I paid for this is so Aaron sorry you got to dumb that down right so hedging risk right now right so there's a there's two currencies people want to do business together explain to us specifically what hedging risk is why do people hedge that risk on currency in a very simple manner when you have an importer for example that is uh buying uh some some type of an inventory for example an importer from the US that is buying a uh for example in the inventory which is wine okay from Europe so he's a donor base he's selling his Wines in donors but he's paying for his uh you know Wines in Europe so the exposure between the Euro and the dollar is affecting him so if he's buying it in Euro for example and you know Tilly's actually purchasing it the euro is going you know uh increasing versus the dollar then he can lose a lot of money basically by paying more so what we're doing here is we're providing him with a hedge that he can fix his euro dollar rate at the uh let's say the Inception of his uh of his order and that's that that way he knows how much he paid in dollars okay for something that he will be receiving in two months time okay and then he knows you know what will be the price for his end clients in the US that will pay for these points and then the actual profit it will be the amount he paid for the specific wine and uh and the the basically the price that he sold the wine at the doors as well so it's dollar versus dollar not dollar versus Euro how big of a risk can this be if I'm a wine owner today we're in a liquor shop in California and I spent a million dollars to buy wine from Europe you know today but I'm not gonna get it until four months from now how much could that value increase or decrease after I've already put up the million USD yeah you know lately it's actually it's very volatile so we can say that over the past even two weeks the Euro increased versus the dollar by eight percent so for example a million dollar or inventory you could have lost 80 000 or 80 000 Euros just by waiting you know for two weeks to pay for the actual uh for the actual ones so that's a lot of money so how much you would have sold those wines you know in the US but I'm not sure that is the profit margin is eight or ten percent so you can even end up losing in his business so that's that's your sales pitch right so you're selling to me now the guy in that runs the wine shop in California you're saying Nathan careful there's an 80 000 risk here pay me at X to get rid of that risk right how do you work your pricing so basically I'm an equality provider so I have liquidities from you know a lot of banks a lot of non-banks and that's my business so I can buy the Hedge very cheaply so for four months time you know I can buy the euro dollar hedge or the euro dollar Ford as we call it in you know in our business at a very good price and that price I'm transferring passing to uh obviously through the wine to the wine buyer okay and I'm just making a small margin on that oh what's going on there YouTube good to see you guys now imagine this you love watching these interviews with SAS Founders but imagine if we took all of the valuation data out from over 2807 interviews I've done manually saves you a lot of time well we've done this we've built the into the beautiful interface inside of founder path check this out I'll show you how you can access this in a second but you log in you connect your stripe account you see your valuation real time you can see what 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give it a whirl again all that valuation data live right inside the platform I hope to see you there all right let's jump back into the interview what margin do you reverse engineer for it's basically 20 30 basis points you know about my cost of hedging which is actually very very competitive I mean if you will try to do that for example versus I mean with his local bank it will pay probably end up paying by four five percent for uh the specific million dollars of uh yep so four percent to a bank point two to point three percent for you so what is that what does that mean for me as though as the guy buying the wine from Europe what am I going to pay you to hedge this risk so you just gonna pay me okay a million dollar in four months time and that will deliver you the Euro so you can pay your uh your supplier in Europe okay oh I see that's that's the business we're doing got it so you're not making money you're not making money then from me you're making money on the other side I'm making money from the spread so let's say I bought the Hedge okay if your dollar now is 104. okay that's my cost so I will sell it to you at 104.20 I'm not say give me that I get 104 what a dollar forty 140 104 a euro dollar is 104 now so for one Euro okay it's 1.04 dollars so for a million euro of an order okay you have to pay me one million and forty thousand dollars that's my cost so for me to earn slightly on because that's my cost okay so I will quote you 1.042 which is this 20 basis point that I was mentioning earlier yeah and that's what the basis point is basically uh two thousand dollars okay on a million euro dollar which is close to nothing so you're making effectively 0.2 to 0.3 percent on effectively the money flowing through your system right your gmv if you were a Marketplace exactly I see all right let's get more your backstory here now that we understand sort of the model and by the way our our wine buyers in the US buying from Europe your number one customer sorry no no no no different different uh areas well who what is the like your top three don't name the customers but the top three groups that you serve what are they actually now but we're serving we are more of an embedded...