How SteadyPay CEO Oleg Mukhanov grew SteadyPay to $7.7M revenue and 10K customers in 2024.

hey folks my guest today is oleg mukenov he's the co-founder and ceo cfo at steadypay an award-winning lending london fintech focused on providing income stability solutions for the gig economy also an angel investor and advisor to early stage startups he was previously a partner and ceo at a london and new york-based venture capital fund called enso ventures as well as executive director of some of their portfolio companies oleg you're ready to take us to the top yeah all right this is sort of like buy now pay later but for personal paychecks huh uh well yes or no so what we're actually doing is new type of sas we like to call it salary as a service right and use new use for the same abbreviation so effectively what tackling is that about 50 workforce globally do not have fixed paycheck meaning that some months weeks or fortnights they earn above average sometimes they earn below average and whatever they earn below average there is not much they can do because they're usually priced out of the traditional markets can access traditional products so what we do we automatically provide them the shortfall if they earn below average and they repay us when they earn above average so effectively we convert irregular pay to a fixed salary and we do not charge interest we just charge a membership fee think about us as netflix for credit and this makes a lot of sense but i guess my question is how does someone establish you what data do they have to give you so you can establish what the average is uh that's actually the cool trick which we're doing and that's why we could grow so quickly we connect directly to their bank accounts and we use technology to actually get all the data so any everything from id check kyc iml establishing that credit risk as well their average and tracking it in real time is done by sac they're like directly to the through the banking connection so in the uk we use something called open banking in other countries we might use api connections quick screen scraping and whatnot that's why effectively customers cannot board in two or three minutes and the rest is done automatically so when you look at your entire user base using you right now what what is for the average paycheck per per month would you say yeah so we're talking at pretty close to the average income in the uk so we're talking about two thousand pounds call it two point five seven dollars not into your bank account after taxes so that's kind of low me to mid level of income so basically the backbone of uk economy that that's per month per month right correct correct okay so now let's say i'm a user just so my audience can really understand this let's say april's been a bad month for me you see via my open banking api connection that i've only collected net after tax is about fifteen hundred dollars you'll give me an extra thousand dollars right so no questions asked as long as you're within the risk parameters um yeah you just get automatically another one key into your bank account to make up for it and when do i how long do i have to pay that back oh it depends on how much you earn next month so for instance next month you can earn another 200 dollars below your average will give you some more money to make up for it obviously there is a limit depending on the customer so we're aiming for about 1000 pounds per customer limit but effectively you pay us back only when you earn at or above average so the obvious question is what if my business is declining and i never have a month again where i go above average how do you ever get your money back uh that's a really good question um there are two things to keep in mind number one is we do not charge interest but we do charge membership so as long as you pay a membership fee we still make certain amount of economics from our customers and number two it's underwriting at the end of the day we provide a credit to our customers and there is no escape from the fact that some of the customers might not pay us back some customers were default and that's where the whole magic of using open banking and machine learning uh to actually identify uh good customers comes in play 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 it 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 it changed over the past 88 days and even set goals for valuation this year now the secret evaluation is there's many different ways to value a sas business so the reason you're going to see three or four different valuations inside of your frowner path dashboard this is all free by the way is because depending on who's doing the buying of your sas company you're going to get a different valuation a vc is going to pay a different valuation private equity firm is different if you're going to do a minority sale that's different and if you sell the whole business that's a different valuation you can see all those when i hover over here right so the teal is what a vc would pay yellow is what private equity and red is if you sold the whole thing outright now what's cool about this is this is not built off random data again you guys hear these interviews on youtube all these datas are built from real time valuation data points founders share with us on the show so traction 1.2 million seed round 3.7 raised they sold 22 to their business go in here and filter by the event maybe you only want to see companies that have sold the whole business well here are a bunch that have been acquired the valuation and the multiple maybe you're going out right now and you're raising your seed round well go in here and look at all this recent seed deals that went down what they raised what valuation they raised at and what percent that they sold there's never been a larger data set of sas valuations than what you can get now inside of founder path and we're thrilled to bring it to you all right we're gonna go back to the youtube video here in a second but if you want to check this tool out if you want to jump in and sign up you can check it out for free to get your valuation at this link this link founderpath.com forward slash products forward slash evaluations or if you go to founderpath.com and hover over products click on get your valuation here and go ahead and sign up to 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 i see okay what's the membership fee per month so membership fee depends on the tier of the product but for our flagship product it's four pounds per week or uh 16 pounds per month give or take okay so about 20 us dollars on average per month something like that okay interesting so twenty dollars per month and then i guess now that we understand pricing what the product is put this all on a timeline for me when did you write the first line of code for the platform um so we started in 2018 and we started two workflows in parallel um one is writing our mvp but at the same time getting approval with our regulator in the uk fca because it's such a new product and nobody has done it before we actually went through the sandbox pro program so we were working directly with the regulator to figure out what would be the right regulatory framework for us um then we launched um a closed pizza for our product in beginning of 2019 so we had 100 people um to test whether it works or not um then closed our first institutional rounds in the end of 2019 and started scaling up in the beginning of 2020. and so how much did you raise in 2019 so in 2019 we raised uh less than a million in total between family and friends and bootstrapping between uh the founders then at the end of 19 we've raised um just over 1 million pounds of equity and 1.5 millions of debt to actually provide lending to our customers and then we just closed couple months ago our series a with another 5 million okay so just speaker sorry in 2020 1.5 million equity and 1.5 million debt so in 20 and the end of 2019 beginning of 2020 1 million of equity 1.5 million of that before that call it half a million of equity and now another 5 million of equity got it you just this year raised another five million of equity any more debt or you're still using that million dollar facility uh we're in the process of actually refinancing it as we speak as a next step ah very cool okay cool um got it so i guess i guess well i guess the right question is so today how many customers are you serving yeah so currently as of today we have 10 000 customers on our platform oh well that's a big milestone congratulations yeah thank you can i take 10 000 times 20 a month you're doing about 200 000 a month in revenue from fees uh yes or no because customers are on a different tier of the offering because that's the revenue for the top tier and the lowest year is five dollars per month which is credit building only so effectively if you take the average um you're getting just over one million annual recurring revenue right now okay got it so you're about eighty three thousand dollars a month in revenue across ten thousand customers right okay got it...